Technology is evolving so fast that it’s frankly hard to keep up with the latest trends in the energy industry. But one buzzword you are sure to have heard recently is blockchain. Blockchain has taken the market by storm, but what does this technology mean for the energy industry? Let’s break it down.
Conceptually, understanding what blockchain is and how it works can get confusing. But what you need to know is this. Blockchain is a system in which a record of transactions is maintained across several computers that are linked in a peer-to-peer network. It’s the record-keeping technology behind Bitcoin and is widely accepted as a more secure and incorruptible system than modern banks. Each computer in a blockchain network has its copy of the blockchain, which means that there are thousands, or in the case of Bitcoin, millions of copies of the same blockchain. Although each copy of the blockchain is identical, spreading that information across a network of computers makes the information more difficult to manipulate.
With blockchain, there isn’t a single, definitive account of events that can be manipulated. Instead, a hacker would need to manipulate every copy of the blockchain on the network. That security and stability is big news for energy. As decentralized, shared and distributed peer-to-peer networks, blockchain promises more control and an easier way to share information with improved accuracy and increased the security of data.
Blockchain and the New Energy Infrastructure
The prospects of blockchain technology have steadily swept through finance, healthcare, real estate, and now the power generation industry. Microgrids are one of the latest ways blockchain is appearing in the energy sector. Blockchain’s potential to infiltrate the energy sector is mainly twofold:
Trading is the biggest way blockchain could change the energy industry. Energy trading can happen instantaneously and securely with a blockchain system. The use of smart contracts condenses trading to a one-step process, eliminating the need for middle-men.
Reporting is another core way blockchain could revolutionize the energy business. Instead of wasting employee time and energy on impossible tasks like gathering and analyzing data for compliance. Blockchain creates a secure system that allows regulators to access data themselves.
It seems like every year blockchain is in some predictive list, each time pledging that this is the year the industry will be radically changed. But it’s important to note that blockchain has already arrived and is currently used on a smaller scale. Broader issues of security and infrastructure continue to slow growth and modernization along these lines.
That’s just the way of digital transformation, however. While blockchain will probably never change the energy sector overnight, it will eventually reach a threshold. Enough organizations will start testing and finding growth opportunities to differentiate themselves through systems and technologies that set them ahead of their competition. Will 2019 be the year that you explore what blockchain can do for you?
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