Blockchain Technology

Blockchain technology has the potential to transform the energy sector as it improves transaction efficiency.

Blockchain and Decentralisation

As any followers of Powerledger will know, blockchain and its associated cryptocurrency POWR are important cornerstones in our conception of the decentralised grid.

Yet both these pieces of technology are often misunderstood, and their role in the bigger picture not clear to many.  Even some well established commentators seem vague on the detail.

So the following page is really dedicated to dispelling the myths and misconceptions about the technology and getting a better understanding of how we are evolving things.

Blockchain technology in the energy market is predicted to rise from USD 200 million in 2018 to around $18 billion by 2025.
- Global Market Insights Inc.

Myth no.1 - There’s no need for a blockchain in a distributed energy system.

Apart from the unhackability of blockchain, there's the decentralisation concept that is part of creating confidence.

Wherever concentrations of executive power and money come together, a system is open to abuse. A good example being the setting of LIBOR rates which were manipulated to make an elite group of people a large amount of money through fraud. 

If a trusted central authority were ultimately responsible for controlling accounting for peer to peer sharing, the possibility of LIBOR style fraud could exist. A whole market could be tipped in a certain direction based on a lack of transparency.

That would deter people from taking up a new way of running energy. So, from that point of view, blockchain facilitates the decentralised way of approaching things. By dispensing with the concept of a trusted centralised source of regulatory authority we think it will be better placed to scale up and become part of the future. Our approach with POWR and our blockchain contemplates current market conditions and ability to move to a decentralised model as the market matures.

Myth no.2 - Blockchain uses an unsustainable amount of energy due to Proof of Work

  • Proof of Work was the original way to prevent spam and it was created around 1997 for the Hashcash system. By setting a problem that required a feasible but non trivial amount of computation, you could deter a DDoS attack or spam, or any other malicious activity where a computer just tries to use brute force to hack in.

    This POW technology found its way into the first blockchains including Bitcoin, but since then there have been new ways created to address the problem. Notably, Proof of Stake, (POS) and proof of Authority (POA).
  • Proof of Stake requires someone to own a stake in the computational activity that is being put out to tender, and the bigger the stake the more say they have. This is the low energy way to avoid malicious activity because any bad behaviour could see the ‘bad actor’ forfeit their stake.

  • Proof of Stake is energy light as is Proof of Authority and it is becoming a standard in the most recent generation of blockchain technology. With POS and POA there is no concern around the amount of energy used because the power required isn’t any more than a typical piece of cloud computing would use. Which brings us onto the reason why we are updating our blockchain and its token systems.

Updating the blockchain technology

  • As Powerledger has grown its ambitions from proving it can work in principle, to getting ready to work at scale, we have had to make some alterations.

    One of these changes is to use a blockchain that can handle a much higher throughput of transactions, and this is why we have migrated to a Solana-based blockchain.

    We are bespoking it for our own ends and getting it ready for the demands that will be placed on it. To give you a sense of this scale, the Solana Blockchain can handle 50,000- 100,000 transactions per second compared with the rather modest 10-15 transactions for Ethereum. Other aspects of the blockchain will just port to Solana in a very straightforward way. 
  • The principle of Application hosts remains the same, though the name of the currency of this changes will now have to make a prudential bond by buying and staking an  allocation of POWR and receiving native tokens on the new PowerLedger energy blockchain for staking and running a validator node.
  • The principle of Application hosts remains the same, though the name of the currency of this changes  will now have to make a prudential bond by buying and staking an  allocation of POWR and receiving native tokens on the new PowerLedger energy blockchain for staking and running a validator node. Sparkz will no longer be the native token of our energy chain previously called Ecochain, but that is the only change of note. In fact, apart from the speed of transaction very little about our use of blockchain has changed. In the future because of the increased performance of the Solana-based Powerledger Energy Blockchain some additional components of our existing platform may become decentralised using smart contracts.

    If you have any question relating to the blockchain or crypto part of the technology, our head of tech, John Bulich will be pleased to answer them.
  • For a deeper dive into the role of blockchain in energy systems, see our GBBC whitepaper.
It’s time the energy market had its lightbulb moment.
- Dr Jemma Green

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