If you look closely, you’ll realize that we’re in an era where machines are becoming incredibly intelligent. There’s no doubt that our mobile phones, home automation gadgets, and even automobiles have earned the appellation, ‘smart devices’.
The unprecedented level of success is largely attributed to novel innovations in big data and artificial intelligence. However, there’s one technology which is largely ignored by enthusiasts in this area and may yet be the missing piece in the puzzle- blockchain.
When people think of the word blockchain technology, there’s an instant connection to bitcoin. Even though cryptocurrency is the most renowned application of this concept, there are several other ways by which we can leverage blockchain technology.
What is Blockchain Technology?
Ideally, blockchain entails peer-to-peer transactions which eliminate the need for a centralized body. A broader definition will describe blockchain technology as an open network protocol which decentralizes the storage of data, making it immutable, secure, and transparent. This is unlike the conventional World Wide Web which works in a centralized manner.
To paint a vivid picture, think of what happens when you make a transaction on your bank account. Everything that occurs is managed by the financial institution and the record, just like that of other customers, is stored in their database.
On a blockchain network though, the record of these verified transactions are simultaneously stored on different servers in the blockchain network. The beauty of this is not only that it is completed anonymously, but it is a transparent process, preventing fraud and corruption.
As good as this sounds, how can it influence the smart grid?
Well, it might interest you to know that blockchain is already being used to revolutionize the energy industry by a firm based in New York known as the LO3. This firm launched a Brooklyn Microgrid project which allows neighbors to trade electricity during peak-demand/low-demand periods. Blockchain technology underpins the process and is leveraged to verify, execute, and record transactions on the network.
What are the Advantages of Blockchain in the Electricity Grid?
1. Electricity Bills Will be Lowered
Remember that blockchain eliminates middlemen, prevents fraud, and makes energy trade transparent. This will be immensely useful when you consider the cost-saving benefits. A peer-to-peer market also removes the existing autonomy and boosts the ease of doing business.
2. The Adoption and Integration of Renewable Energy Sources Will Soar
The European Union has mandated the vision 20-20-20; that greenhouse emissions must be reduced to 20% before the year 2020. If this will be achieved, the process of integrating renewable energy sources must be automated and blockchain offers just that.
3. Investors will be Propelled to Enter the Energy Sector
Before now, the energy sector was not totally appealing to potential investors. For one, they were not enthused at the recondite nature of operations. Neither did they see any new exciting innovation. However, since the emergence of blockchain technology, companies working on blockchain-related projects like Power Ledger and Grid+ have successfully raised $12.53 million and $29 million respectively in funding.
It is possible to go on and on about how wonderful this technology is, however, these few points will suffice for now. It is, however, important to note that the technology is still puerile and might take a while for it to become widely adopted in the energy sector. Looking at how far Bitcoin has come in just 9 years imbues us with the confidence that the future is bright.