Blockchain for the energy

Nowadays we hear more and more about blockchain systems, often associated with cryptocurrencies, but this technology could change the way energy is managed in the near future.

Blockchain is a system of registration and validation of transactions that can be of different nature, for example, in the case of Bitcoins, money transactions.

To explain how it works, it is often compared to a “distributed leadger” (ie a database) that contains all the transactions and it is fragmented and replicated in different nodes on the network.
Each node of the network saves, updates and replicates the database independently and for every new transaction a “block” is added to other transactions that will be then validated.

This validation usually occurs from nodes, called “miners”, through the resolution of a very complex mathematical algorithm. The first node that solves the algorithm has the right to have the block of processed transactions validated.

Key features of a blockchain:

  • Reliability, due to the fact that more nodes control the system, and this becomes safer from external attacks;
  • solidity because the information entered in the network cannot be modified;
  • transparency because transactions and information are visible to all nodes (even if encrypted);
  • irrevocability of operations, it is not possible to cancel or modify an approved transaction and at the same time it is tracked in a timely manner;
  • convenience given that no third party interlocutors are involved in guaranteeing or approving transactions.

Public blockchains

In public blockchains, anyone can access the network, make transactions or create and verify new blocks.

This structure is completely decentralized and there is no entity that controls the access authorizations but all the functions are assigned to the various nodes equally.

Possible uses of a blockchain

The possible uses of a blockchain technology are various and possible uses involve the banking, insurance, commercial contracts, payments and financial transactions, but especially the energy sector.

How can blockchain technology revolutionize the world of energy?

With the spread of widespread generation, storage and electric mobility, there is a pressing need to exchange energy in an “energy-sharing” logic, where energy exchanges can take place without intermediaries and with freedom on time and on ways.

All this can be achieved by using a blockchain structure, through which each user could choose whether to exchange their energy with their neighbours, consume only “clean” energy, receive money or compensate with that amount.

The blockchain could also favor the creation of microgridservices, thanks to smart meters that:

  • Could guarantee real-time monitoring of energy, avoiding double counting (applying a time stamp to each transaction before adding it to a block);
  • And integration with Big Data structures in order to guarantee fast and extremely detailed transactions for each participating user.
    However, all microgrid transactions would be processed automatically, transparently and on time. Microgrid pilot projects have been launched in New York, Australia and Germany.

To maintain a good level of privacy in the network, the data is protected by cryptography so that nobody sees the data that does not belong to them in clear text.

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Blockchain for the energy was last modified: February 14th, 2020 by Team VP Solar