So far, Blockchain has been known as the technology behind the digital currency Bitcoin - and for attacking the established finance industry. Now it turns out that the Blockchain could also accelerate the energy turnaround rapidly and revolutionize other industries
Electricity comes from the socket. And for that to be so, we need energy companies, network operators and electricity traders on the stock market. Or not? In Brooklyn, New York, the counter-design is being tested: ten households supply each other with electricity that they generate themselves. They need no more than a few solar panels, computers, several meters of power lines and sophisticated software. While the photovoltaic systems on the roofs convert sunlight into energy, the program painstakingly notes how much electricity was produced. If a participant turns on his washing machine, it counts back, calculates what the consumer owes his neighbor and pays him right away. Middlemen such as power companies, network operators or banks no longer need it. Welcome to the future of energy trading.
Also in Europe there are first projects
What began last spring as an experiment by the two American companies Lo3 Energy and Consensys on President Street in Brooklyn could quickly spread. Only a few companies still romp around in the possible future industry. The few pioneers are all the more enthusiastic for this: "The power is just going from the energy suppliers to the customers," says Erwin Smole, co-founder of the Viennese start-up Grid Singularity, which also works to enable people to trade electricity without complications The company, which was founded in March, not only has its eye on hipster self-service providers in the New York neighborhood, but also aims to help people in developing countries benefit from cheap solar power, as do industrial companies in Europe and the US The ten-person team in Vienna and the United States are expecting first sales in London next year, but the mission goes far beyond fast profit, Smole says, believing that the energy world of tomorrow will be freer, more open and self-determined than it is today.
Basis is the Blockchain - the technology of the Bitcoins
The tool for this upheaval has been freely available on the Internet for everyone since October 2008. At that time, Satoshi Nakamoto published the software and manifesto for Bitcoins, a digital currency created to make banks and central banks obsolete. For the longest time cryptocurrency has been dismissed as play money for drug dealers and other criminals. In the meantime, it is clear that the true revolution is in the technology behind the bitcoins - in the "blockchain." Because this code creates something that states, companies and institutions have so far made expensive to buy: Confidence In simple terms, the blockchain is a kind digital bank statement, where all transactions are stored regularly, seamlessly and forgery-proof in a long chain. As these data are stored decentrally on the computers of all participants, it is de facto impossible to manipulate them secretly, if a hacker succeeds in creating a computer cracking and changing the record notice that the other computers and overwrite it quickly.
The blockchain can securely store data of all kinds
Since then, we no longer just have to trust banks that a transfer is made properly. It is no longer the state or the notary who assures us that we have actually acquired a piece of land. There is an alternative in the form of incorruptible, decentralized software. The most well-known Blockchain stores, who is the rightful owner of the worldwide 15.8 million Bitcoins. But technology has emancipated itself from the virtual currency. Not only bitcoins, but stocks and power can be fast, cheap and safe. Much of the Blockchain world is reminiscent of the first attempts of the Internet. The enthusiasm is great, the promises as well. The fact that business models are often still bumpy or - like the sale of electricity from person to person - in some places even prohibited hardly bothers anyone. The company Grid Singularity is determined to make Vienna the Mecca of the blockchain energy world. In February 2017, it gets the star of the scene to a symposium in the Austrian capital: Vitalik Buterin. Together with Grid Singularity founder Gavin Wood, the Russian living in Canada has developed the first blockchain to Ethereum, proving that the idea can do more than count bitcoins. Ethereum is a platform for blockchains that can also be used to embed "Smart Contracts." The program automatically detects when an agreed service has been provided and automatically initiates payment.
Companies and states are starting to use the blockchain
Since that discovery, all the dams have been broken. Entrepreneurs, states, intelligence agencies and central banks are considering how to use the program for themselves. The makers of the "Decentralized Autonomous Organization", in short: DAO, aim particularly high. They want nothing less than to reinvent entrepreneurship. The DAO is a blockchain-based mutual fund that does not need a boss, head office or fund manager. The partners decide anonymously and democratically in which companies their 140 million US dollars are invested. Others also have plans: The US Department of Defense wants to use the blockchain to develop a rogue news service. Denmark and Greece are considering converting their land register to blockchain. Hundreds of fintechs are romping around in the financial industry, making banks compete with dumping prices. Even young internet stars like Uber come under fire. Arcade City offers a similar car rental service. Former Uber driver Christopher David founded the company and now automatically networks drivers and passengers in the US via Blockchain. The brokerage of Uber - and the fees for it - are thus eliminated. The World Economic Forum Foundation, which hosts the Economic Forum in Davos, expects that by 2027, one-tenth of global economic output will be stored in blockchains.
So far there are no legal regulations
Regulatory barriers are still slowing down the process. The fact that neighbors like Brooklyn supply electricity directly would not be possible in Germany or Austria. At present, private electricity suppliers do not fit into the complex system that has been holding the energy industry together for decades. Central banks and financial regulators are as skeptical as energy regulators when it comes to digital currencies. "Much still happens in a legal gray area," says Tina Barroso Guerra from Forum Solarpraxis. "Now it depends on how fast the states react". It is likely that they will react soon. After all, not only start-ups but also influential corporations chase the trend - albeit with different motives.
Corporations are forced to rethink
For example, Deutsche Bank, Swiss UBS, Spanish Santander and the American Bank of New York Mellon are working on their own digital currency with which they want to trade with each other from 2018 and save tens of billions of euros. Even in the energy world, the old energy providers have already smelled fines. Vattenfall and RWE are working intensively on the Blockchain. The company from the Ruhr region works together with the Saxon start-up Slock it on charging stations for electric cars on Blockchain basis. The companies would have no choice, says Erwin Smole of Grid Singularity. "Either they wait and end up being pure copper cable operators or they are already seeing what role they can play in the future". His company sees itself as a mediator between the old industry and the newcomers. Corporations could, for example, finance large electricity storage systems, feed households their excess self-generation and then resell them, according to the idea. The prices and other agreements would be stored in the blockchain, the shops automatically executed - the cost would be practically zero.
There are also security holes in the blockchain
But of course, this development also carries risks. One of them is the substantial elimination of the human factor in the economy. Who guarantees that electricity suppliers do not pull the plug fully automatically via blockchain, if customers are a few days late with the bill? Who guarantees that the young technology earns the trust it offers? The history so far gives rise to skepticism. Although the blockchain was hacked successfully so far, found criminals again and again gaps in the system itself. Even from the DAO secretly $ 50 million were deducted without cracking the software itself. The attacker used only a loophole that had overlooked the makers in their former concept. The owners responded with a taboo break and subsequently changed the allegedly counterfeit-proof chain to save the capital. The "confidence machine", as the British magazine "Economist" calls the Blockchain, stutters so still. The chance that people can trade with them freely from corporations is great. The proof that a computer program is sufficient as trust-building putty for the world, is still pending.
Interesting writing... We will see many big names starting to use blockchain in a short period of time... What changes will that bring to the world we can not even imagine at this moment.
Yes! cryptocurrency is the gamechanger, Thanks for reading.