For many observe and participate in the crypto industry, a conversation that includes “blockchain” and “energy” often revolve around the resources required for mine-proof blockchains work like Bitcoin and their environmental impact. In many ways, this is for good reason: Many Bitcoin mining is done by using a cheap, coal-powered electricity in China. While initiatives such as wind-powered farm Soluna mining gave way to a more sustainable future, energy consumption and waste remains a challenge for the community of proof crypto-work – but this is just one way that blockchain and energy industry intersect.
Over the past few years, there has been speculation in blockchain technological capabilities to truly make the energy sector more efficient. The energy sector is currently highly transactional systems and complex with several sources, suppliers, distributors and intermediaries, and some crypto startups have emerged to streamline existing processes and create new functions. Areas of opportunity include commodity trading, peer-to-peer energy trading, elimination of middlemen retailers, data management, accounting and automation.
How to operate the energy sector?
Before diving into how blockchain can improve the energy sector, it is important to first understand how the sector operates. In general, the upstream generator produces the raw material is processed and transported by the delivery network midstream to downstream distributors, who sell to end users. While this seems like a fairly simple process at first, the complexity increases when considering the number of generators, various energy sources (solar, wind, nuclear, oil, etc.), and the extent to which this process began overlapping.
For example, when electricity is delivered to your home or business, it’s likely sold to you through retailers (downstream) that contracts with utility companies (midstream) which have the necessary electricity grid and purchase electricity from the (upstream) power plants. But where does the electricity come from? Upstream electricity generator itself is the downstream customers of oil, natural gas, diesel fuel and to generate electricity that it generates.
On top of the supply chain system is an ecosystem of commodity traders, leading to highly competitive markets, and efficient, but also greatly enhance the financial complexity of the energy sector.
Finally, there are consumers, who need to use and pay for the energy they use. The bill arrived in the mail at the end of each month is the culmination of this whole process. Unlike most of the supply chain system and commodity markets, the end user of this process is really directly use the commodity bought.
Together, these elements make the energy sector a very suitable candidate for technological innovation with blockchain. It consists not only complex supply chains with the need for increased transparency and improved data management, crypto genius guide but also a very transactional market that will benefit from the instant settlement. Transparency and the provision of empowering the end-user can blockchain of-business and consumer-facing industries.
How blockchain impacting the industry so far?
With the potential synergies between blockchain and energy systems, it is not surprising that many projects have been taken at this intersection. A study in Renewable and Sustainable Energy Review published last year provided a systematic analysis of more than 140 research projects blockchain and beginners in the energy sector, countries around the world that includes.
The study categorized blockchain initiatives in the energy industry in the following eight categories: 1) metering / billing and security; 2) cryptocurrencies, tokens and investment; 3) decentralization of energy trading; 4) The green certificates and carbon trading; 5) network management; 6) IOT, smart devices, automation and asset management.