The underlying crypto-ledger technology holds major promise for the energy industry, argues Policy Exchange's Josh Burke. We we need to separate the usefulness of the underlying digital architecture that Bitcoin is built upon - blockchain - from the frenzy that currently surrounds this dash for cash.
Blockchain is a foundational digital technology that has the potential to be truly transformational. It can be applied in a number of ways in the energy and environment sector, from peer-to-peer trading of wind and solar power generating systems connected as micro-grids to supply chain traceability and efficient emissions trading. Incorporating the execution of smart contracts into these systems has the potential to offer lower transactional costs and scaleability. As contracts are executed automatically when certain pre-conditions are met, this reduces the need for human involvement.
For example, an Australian start-up called Power Ledger is developing a peer-to-peer renewable energy trading platform using blockchain, which enables consumers to buy, sell, or exchange excess renewable electricity directly with each other.
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