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Blockchain, Featured, Technology

Energy Transaction Solutions with Blockchain Architecture

The exponential increase in blockchain adoption kickstarted a quest for its adoption across different industry sectors. Its intrinsic characteristics make blockchain a versatile technology, applicable across countless domains, even outside banking, finance, and fintech. In fact, blockchain can be a powerful tool for increasing efficiency in the most critical transaction networks of modern time- the electrical energy grid.

Challenges Faced in Existing Energy Transactions

With rising global pollution and environmental concerns, the demerits of a centralized energy system become glaringly obvious. Significant energy losses occur throughout the network processes. The losses occur mainly due to: 

a) Long Distance Transmission and Distribution.

b) Low-fault tolerance capacity of the network system. 

Renewable green energy is the preferred alternative from an environmental perspective. While they do not cause pollution, the problem lies in the fact that they are decentralized and separate. The challenge lies in connecting them to cover energy distribution across a large area, say a district, province, or even a nation. Research scientists and experts came up with blockchain as a potential solution. The technology has also been implemented successfully to build efficient platforms for energy trading and distribution.

Also Read: Blockchain in Data Analytics: Combining Data-Centric Technologies for a Better Tomorrow

The Backdrop: Using Multiple Energy Sources

Renewable energy sources can be utilized and integrated into existing power systems. The topic of contention is the optimum utilization of these sources through managing microgrid markets. Research has demonstrated the effective transformation of conventional energy sources with purely renewable energy. Flexible DSM management within blockchain-optimized microgrid networks is an effective solution. The model based on game theory provides the best outcome through efficient decentralized control.

Also Read: Blockchain Tokenization in Real Estate Asset Management

Blockchain Solution for Energy Trading

The distributed ledger sharing mechanism of blockchain provides an efficient solution for the challenges faced by energy transaction markets. The implementation focuses on 4 aspects:

a) Building a transaction platform

The operational performance of a trending platform can be greatly increased by using an integrated demand response mechanism. Decentralized IDR resources can exceed expectations overriding flexible load concerns with the help of blockchain technology. 

b) Maximization of economy and security while addressing privacy concerns

Blockchain consortiums for energy trading in combination with digitized task offloading can resolve any associated security and privacy issues. P2P energy transactions on blockchain architecture feature simulation results for better economic simulation while enabling network nodes to become self-sufficient in terms of power. 

c) Factoring the platform’s latency and scalability issues

Blockchain-as-a-Service(BaaS) frameworks use programmed network architecture to decrease latency. The blockchain network secures any underlying trade transactions. Model solutions featuring one transaction per 5 minutes and over 600 participants have been successfully achieved in the Ethereum protocol. 

d) Application of blockchain energy trading platform

Blockchain energy trading solutions, while being a popular topic across the academic fields, are still distant from real-world applications. Practical application of the technology is still one of the primary objectives of blockchain research. Factors that need to be accounted for include adaptability and flexibility. Incorporation of other advanced technologies may also be considered for increasing efficiency. Blockchain solutions provider HashCash Consultants had previously proposed a blockchain-AI prototype solution for energy distribution. 

Also Read: The Right Balance of Public and Private Cryptocurrencies

Final Words

Blockchain can provide an efficient solution for the challenges and losses in the energy trading and distribution sector. It can facilitate the integration of energy from multiple sources- a feature that will be pivotal to the incorporation of renewable energy into mainstream use. Research and academic reports are positive. All that remains is the utilization of blockchain-powered energy in practical scenarios.

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