In 2017, households were delivered another blow when energy prices rose again.
On average, this latest rise means over 12
Unfortunately, each of the UK’s “Big Six” energy providers are hiking their prices. This means even going to the effort of changing energy supplier has little impact.
Many of us want to escape being hostages of the “Big Six” and reduce our energy bills.
Fortunately, with the rapid rise of blockchain technologies, a solution could soon be available.
Read on to find out about what a blockchain is, why it’s not the same as bitcoin, and how it could soon be helping us save money on our energy bills.
What Is A Blockchain?
In accounting, a ledger is used to record financial transactions. A distributed ledger does the same but can track more than just financial transactions.
A distributed ledger can also track asset transactions to keep a record of who owns specific items. These assets could be physical or digital.
Unlike a traditional ledger, where there is just one copy (and maybe a back-up) a distributed ledger has thousands of copies stored on individuals’ computers worldwide, which are all connected together (sometimes known as a peer-to-peer or P2P network).
When there is just one copy, someone could sneak in a transaction that is incorrect and falsely credit an account without anyone knowing.
However, as there are many copies, new transactions are checked against the other copies to ensure that it is valid and correct.
New, valid, transactions which are submitted to be recorded onto the ledger are bundled into a block.
It is these blocks of transactions which make up a blockchain. Essentially, a blockchain is just a record of transactions.
So, it's not the same as Bitcoin?
Bitcoin is a Proof-of-Work (PoW) blockchain, which means to add a new block to the blockchain, a complex mathematical problem needs to be solved. Computers connected to the network solve these problems - not humans!
Solving this problem is called “mining”, and the “miner” who gets the answer right is rewarded with bitcoin to incentivise the “miners” to continue to solve the problems to add new blocks to the blockchain.
Unfortunately, solving these problems requires a tremendous amount of energy. In fact, research conducted by PowerCompare.co.uk, a UK energy comparison site, found that bitcoin mining is responsible for 0.13% of the world’s energy consumption.
0.13% may sound like a small amount, but the amount of power used could power 6.1 million Britons.
They estimate that the global cost of mining bitcoin totals £1.1 billion a year. So, if you were to chose to mine bitcoin, you certainly wouldn’t lower your electricity bills!
How can blockchain technology help lower my electricity bills?
Take a look at how some of the companies below are looking to change the way we purchase.
Using blockchain technology to record transactions, residents are now able to buy and sell energy from each other in a secure and traceable way without massive administrative overheads.
The use of blockchain technology also prevents an intermediary taking a cut; keeping costs low.
Purchasing from neighbours, without the loss of energy in transmission is helping residents to save money on their energy bills.
One of the most significant selling points for many of the Brooklyn residents involved, aside from the cheaper energy, is that if their primary grid failed, e.g. due to a natural disaster such as Hurricane Sandy, their local grid would remain functional.
Here is a video providing an overview of the project:
Their concept and team has also made it to the finals of Richard Branson's "Extreme Tech Challenge" - beating many other humanitarian tech companies in the process.
Like Brooklyn Microgrid, Power Ledger are enabling individuals to buy and sell energy through the Power Ledger platform. However, peer-to-peer trading is just the starting point for Power Ledger's grand visions to democratise the energy industry.
Power Ledger has already completed one trial in a 600-person village for retired people. They found that pro-sumers (people generating electricity through solar panels) could sell their electricity to consumers (people buying electricity) at a higher rate than they could sell it back to the grid for.
Unlike the energy-intense proof-of-work blockchain that bitcoin uses, Power Ledger use a proof-of-stake blockchain.
Proof-of-stake consumes significantly less energy as there is no mining process. Instead, the holders of the tokens (those with a “stake”) create the new blocks.
Electron aims to create a whole ecosystem of energy-related products. One of which is to make it much quicker to switch energy providers.
Being able to quickly change suppliers will allow consumers to get the best rates. It will also push the "big six" to remain competitive in their pricing to prevent losing customers.
So far, Electron has created dummy data to replicate all of the energy meters in the UK. They have also proven that they can store this data on a blockchain (for example, who owns each meter) and facilitate quick transactions.
It should be noted that IOTA don't use the Blockchain per se, rather their own innovation called "The Tangle". It is similar in concept but also doesn't require mining - thereby saving energy.
The following video shows how neighbours and communities can share excess electricity to maximise resources and cut down on costs.
We are certainly living in exciting times!
Innovation Set To Revolutionize The Energy Industry
The image below from GTM Research shows more companies entering the space and as you can see - there's some big names among them.
Blockchain = Much More Than Bitcoin
What do you think? Would you like to be able to switch providers within 15 seconds or buy electricity from your next door neighbour?
Let us know in the comments below.