As our demand for energy increases alongside the growth of electronic devices, we have become aware of many concerns relating to how we get our energy today. Blockchain is seen as a key component for how we can solve these problems.
The Energy industry has been a mainstay in the daily lives of the human populous ever since the first industrial revolution. As technology advance, the more energy-related products we end up using, including computers, smartphones, household appliances and more. With this in mind, our consumption of energy has been growing tremendously and the exploitation of non-renewable energy sources such as fossil fuels, coal and petroleum have been evident. This, as well as other challenges, has led to a lot of uncertainty within the energy sector.
Luckily, on the other hand, technology also brought with it many innovative breakthroughs to combat these challenges. Right now they are slowly but surely transforming the way we produce, transport and consume energy. One of them being blockchain.
Currently, the setting where blockchain is seeing the most use in the energy sector is within grid management. The traditional method of energy distribution that many are using right now is built on a centralized system operated by major energy and utility companies. It consists of the main grid where energy is produced at large stations and delivered to users through a wide transmission network.
The underlying concern with this type of network is that they are not very efficient. Much of the energy produced is wasted in the process of generating power and delivering to customers that are long distances away. Then there is also, of course, the issue that many if not all centralized energy generation uses energy sources that contribute to a number of environmental impacts such as air pollution and waste generation.
As an answer to this, some people have started using smaller grids that are linked to localized power sources in a decentralized pattern. What this entails, for example, are buildings of a given neighborhood or block that have their own solar panels and are connected to nearby residences. In this case, owners of the solar panels can sell any surplus of electricity they have in storage to their neighbours.
Blockchain is utilized in this peer-to-peer network for energy to manage and ensure an accurate record of transactions, decentralized accounting, and metering and shared and transparent data information to users of the network. It provides a reliable, low-cost digital platform for making, validating, recording and settling energy transaction in real time across a localized and decentralized energy system.
At the same time, blockchain allows for high-end security. As modern electrical grids introduce computers, smart meters and sensor it can be prone to malicious intrusion or attacks. Blockchain can overcome these threats. The technology is naturally secure due to how it stores data. As a ledger of information that uses a distributed network, blockchain does not have a single point of failure. A hacker will need to attack numerous machines at the same time to gain a fragment of data and put them together.
Also with this in mind, the fact that centralized power stations are perceived as potential targets for hackers encourages governments to accelerate the shift towards distributed energy resources which decrease the risk of attacks.
In the coming years, blockchain combined with embedded processing, real-time communications, and appropriate software, will surely improve the reliability and efficiency of the grid and network. This will lead towards the ultimate goal of an electrical grid where it delivers power efficiently power and economically affordable in accordance with the needs of the user.
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Asia Blockchain Review is the largest initiative for media and community building in Asia for blockchain technology. It aims to connect all blockchain enthusiasts on a regional scale and facilitate the technological foundation of blockchain through a range of group discussions, technical workshops, conferences, and consulting programs.
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