What is blockchain, and why is it important for the energy sector?
If you know anything about blockchain, you are probably wondering how it is related in any way, shape, or form to energy. Indeed, the concept of blockchain was originally confined to the cybercurrency known as Bitcoin, where the technology chronologically records and links transactions made across the network, securing the Bitcoin environment.
Now, however, the blockchain concept is being applied to situations beyond Bitcoin, and especially in the energy sector. Inquiring energy experts asked if this same technology used to track the flow of cybercurrency could be used for energy transactions. And, as it turns out, it might be able to. Thanks, energy experts!
With blockchain, an energy consumer would be able to securely sell any unused energy to a willing buyer, such as a neighbor. Blockchain would track the flow of electrons on a distributed grid, much like that of currency in a cyberenvironment. At its core, blockchain would be able to create a secure, instantaneous, and independent system for energy transactions.
For all its positives, there are some obstacles that blockchain must overcome before it can meet the high expectations of energy experts, especially on the technical side. For instance, blockchain does not currently provide the sufficient bandwidth and throughput needed to make global energy transactions a reality. But don’t despair! Many are working to create blockchain a usable, everyday part of life. This map shows the areas where blockchain research has made headway:
What would a blockchain future look like?
If blockchain technology gets past the current technological barriers, it would significantly alter the energy sector. For one, it would eliminate the need for an electricity retailer, as transactions would happen directly between an energy producer and an energy consumer. This means that a household would be able to buy the energy it needs from a preferred sustainable energy producer. Furthermore, any unused energy by a household could be sold or gifted to a neighbor. The blockchain future is a bright one, and we look forward to it!