Blockchain will sustain the world’s energy system in future

Blockchain will sustain the world’s energy system in future

In 1993, most people were not aware of the internet-but a decade later it had become an indispensable part of life. This is likely to be the case with

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In 1993, most people were not aware of the internet-but a decade later it had become an indispensable part of life. This is likely to be the case with blockchain.

Blockchain technology forms the basis of the digital currency known as bitcoin. It can be described as a type of a decentralized ledger that monitors the activities millions of different computers-all of which are linked to each other. The linking together of blockchain, smart grids and prosumers may create a transparent platform that will facilitate affordable and smooth transmission of renewable energy from the homes to the grid and vice versa.

By 1993, very few people had ever heard of the internet or the iPhone, which was only launched in2007. The disruption and explosion that occurred over the next ten years is simply mind-boggling. The internet changed people’s way of life around the world, and blockchain is poised to be the next internet.

For three years running, technology has been the major driving force behind the opportunities identified by DNV GL in the annual Global Opportunity reports in tandem with its partners-Monday Morning Global Institute, a think-tank, and UN Global Compact. During the current year, the organization is addressing the problem of cybercrime, which is a critical global challenge; a risk that only exists in the digital world. In a world that is interconnected and that is characterized by an ever-increasing dependency on the internet, online crime has grown in leaps in bounds. The UN Sustainable Development Goal 9 has identified the creation of a secure digital infrastructure as an important driver of economic development and growth.

Over fifty percent of the world’s population now lives in cities. This has made mass transportation, the integration and distribution of renewable energy and the development of energy systems to become increasingly important. Equally vital is the growth of new services riding on the communication and information technologies.

It is generally agreed that technology is a driver of opportunity, and the full potential of blockchain has yet to be unlocked. As blockchain advances, the result will be a system that basically automates the process of establishing trust and verification, rather than just having an internet that uploads information and content.

The impact that blockchain will have is still difficult to grasp. However, many people will not need to grapple with the challenge of understanding the technology, just like they did not have to know about HTML and TCP/IP when internet gained widespread usage. Once the blockchain applications start emerging, everybody will be able to understand and use them.

How the energy blockchain will work

In future, the electricity distribution system will comprise of millions upon millions of endpoints that will interact with each other, solar, microgrids, smart appliances, energy management programs and sensors. It will be imperative to build secure system that is capable of instant verification of autonomous transactions over all these nodes even with the changing market conditions.

Blockchain technology can potentially ease the management of distributed grids using smart contracts. Smart contracts signal to the systems the transactions to be made and at what time. They are designed with well-defined rules that govern the flow of energy and storage, and this ensures that supply and demand is balanced.

Blockchain technology may also have a direct effect on the process of grid management and storage.In addition, it can play an instrumental role in the growth and development of what is called virtual power plants. These are energy-generating installations that are linked through a smart grid but are not concentrated in a central area. Naturally, blockchain could be critical when it comes to remunerating those people who are operating the virtual power plants.

Bitcoin is proof that blockchain is viable. Today, investors, researchers and start-ups are looking at ways of applying it to energy and the wider internet of things. Nobody has all the answers as yet. Probably the development path will be through smart meters, then appliances and finally across microgrids. Currently the number of theories, prototypes and proposals exceeds the number of proven solutions.

Blockchain technology has the ability to disrupt the energy system and enhance energy democracy. It can potentially create a new world order in the digital sphere, disrupt conventional business models and redistribute power. The new sustainable opportunities that can be harnessed by this technology will be covered by the Global Opportunity Report of 2017.The report will be launched in the city of Oslo, Norway, on 24th January.