The blockchain is a transformative technology in which digital transactions are stored within a distributed, decentralized ledger. In practice, this means that there’s no need for a centralized middleman or gatekeeper in order to govern a system of transactions within a network.
Blockchain first rose to prominence with Bitcoin, the cryptocurrency which attempts to compete with traditional currencies as a store of value and a means of sales and purchases. Over the years since Bitcoin was debuted, other cryptocurrencies and related blockchain-based solutions have been proposed and implemented.
While most know blockchain technology as the enabler for cryptocurrencies, the potential scope of blockchain stretches far beyond cryptocurrency, with the possibility of impacting or even transforming whole industries.
Blockchain and the Energy Sector
One industry particularly ripe for blockchain implementation is the energy sector. Recently, the nation of France has taken coordinated steps to explore and develop blockchain technology as it relates to applications in energy. In late 2018, members of the French parliament submitted a report asking for a 500 million Euro investment in blockchain technology over the next three years with the aim of positioning France as a blockchain leader in the European Union.
Of particular interest are blockchain solutions in the field of energy. There are currently two main areas in which blockchain experts believe that the technology is poised to make immediate impact: Peer-to-peer energy trading and charging electricity-based vehicles.
With regard to peer-to-peer energy trading, the decentralized nature of the blockchain offers the potential for greatly increased efficiency of energy usage. Producers and consumers of electricity, representing both corporate and individual entities, will be able to trade energy according to real-time needs without the need for a centralized governing figure. By offering the possibility of allowing for instantaneous communication without the slow-down of a gatekeeper, blockchain can create an energy market that flows freely according to changing consumption and production patterns.
On the electronic vehicle front, a long-time problem has always been the effective range of such vehicles. By building a blockchain-based network of charging stations, individuals will be able to rent out their private stations to those in need, creating a structure for electronic vehicles to charge up as needed at all times.
Challenges persist in attempting to implement blockchain technology. Some of these challenges are legal in nature, as nations attempt to create effective regulatory frameworks for blockchain-based networks. Blockchain is unique in comparison to most traditional networks in lacking a centralized authority aside from the algorithm itself, and legislators are still grappling with how to deal with it.
Other difficulties are more along technological lines. For one, blockchain is nearly always a significant consumer of energy in order to power its algorithm. Finding ways to ameliorate blockchain energy usage will further the attractiveness of blockchain networks. And blockchain is a young technology, meaning that experienced developers are relatively scarce. The maturation of blockchain development tools would be another factor greatly increasing the spread of blockchain-based solutions.