Finance, medicine and education – “this is where blockchain is really going to take off in the short term,” says Ashley Pilipiszyn, PhD researcher at University of Geneva.
The potentially game-changing technology that instantaneously transfers information over a distributed network is already changing how transactions take place online, making them more transparent and secure thanks to integrated database encryption.
But blockchain will also have applications well beyond those fields, say experts like Ms. Pilipiszyn as they investigate a myriad of use cases.
One area where blockchain could have a big impact is energy, where information and communication technologies (ICTs) are increasingly being used to meet the growing demand for smarter, more efficient uses of energy worldwide.
Energy consumption is increasing; the US Energy Information Administration predicts that there will be a 48% increase in demand for energy worldwide from 2012 to 2040. Every home in Great Britain will have digitally connected smart meters by 2020.
However, while the market may be primed for blockchain’s introduction, applying it in the energy sector is more complicated than other industries.
“It is not just a financial transaction, it is also a physical transaction of electrons,” Pilipiszyn explains. “You have to get electrons from solar panels on house A to house B, for example. So how does that actually work in reality?”
Three pilot projects are currently underway in New York, Perth and Lyon, all at different stages of development, hoping to answer this question. However, these are proof-of-concept tests, operating in single family homes or rural areas through isolated micro-grids, and demand a lot of attention from the community, which may be more difficult to manage in residential apartments.
“I think there still needs to be a lot more piloting going on to actually understand what is the business use case,” Pilipiszyn says. “How does it increase efficiency? Can it increase energy savings? Is it actually helping promote sustainable behaviour, or are we just using AI and machine learning to take care of it for us and make it convenient?”
Moreover, she points out, “blockchain is meant to be fully transparent yet extremely secure.” However, in the energy context, this can be difficult.
In systems with one entry point, cyberdefense can be better fortified against cyberattacks. “Now, as we are moving to a distributed energy system, and you’re having everybody produce their own energy, sell it back to the grid or their neighbours and all these devices have to be online and connected, all of a sudden, you just exponentially increase the number of doors for entry to manage. So it’s a huge cybersecurity issue.”
Security is a growing concern for various applications of blockchain. ITU’s workshop on “Security Aspects of Blockchain” on March 21, is focused on collaborative security to build trust in cybersecurity of blockchain as well as future directions of standardization activities surrounding blockchain.
Regulation will also be a vital component to the puzzle of integrating blockchain into the energy market, to help ensure that customer data is protected and fair industry standards are operated by.
This is especially important, as at present, “we have no guiding principles, protocols, standards or a central location where everyone can share their information,” Pilipiszyn explains.
“Because we are in a phase of experimentation, I think it will help foster innovation. I think we need more and more people to play around with it – to understand what blockchain is and what is possible. That will expose challenges and opportunities that can help address the regulation question.”
Pilipiszyn says that this will mean investing in more pilot projects, both at a city and community level.
“I think that people need to understand that your own home, your own community, is its own lab – a city is a living lab!”
For this, blockchain being open source is key, says Pilipiszyn. Not only will it help to gain valuable feedback on how the technology can work in a real-life setting, but it could encourage community engagement – arguably the lynchpin to the whole project, so they can understand how the technology works and what it means to sell energy back to the grid or to each other.
“Everyone can play with it; that’s the beauty of open source,” Pilipiszyn says. ”If you have a smartphone or laptop and internet access, and you have something to work off of, you can engage and contribute to the future of blockchain!”
By Lucy Spencer (@inquisitivelucy), ITU News