Many varying industries across the country are finding themselves in a position well suited for drastic innovation. But while many fields such as finance, communications, data-science and others are being swept away by blockchain technology, the energy industry has traditionally been slow to embrace change. Despite a growing market for green-energy and more decentralized power solutions, traditional energy companies have restrained themselves from jumping into the world of opportunity that decentralized technology can provide.

To fill this entrepreneurial gap, there have been a number of ICO’s and crypto-projects jumping on the scene to provide energy-solutions to the public at large. While most of these start-ups are at an early level of development, these projects help bring a variety of solutions to the table.

Blockchain Technology

A blockchain is a distributed, decentralized network as well as a public ledger where all the transactions within the network are shared with every participant in the system. This means that there is no need for central servers or ledgers to authorize and authenticate transactions. Not only are transaction speeds greatly increased under this model, but transaction fees to third-party intermediaries will no longer be a thing.

In our current global 21st century marketplace, it’s impossible to imagine how our lives would look like without the availability of energy resources that power our world nonstop. The global electricity market is calculated to be worth approximately $2 trillion but is largely controlled by a handful of large corporations. This remains true whether it be hydro, fossil, nuclear or even renewable resources such as wind and solar. The major players in the market control the dynamics to maximize profits, despite the fact that consumers and end-users are clamoring for alternative solutions.

For one, people are becoming more aware of the state of our environment, especially in regard to green-solutions, carbon-dioxide emissions, and pollution in general. While this is a big enough trend in and of itself when coupled with the fact that there is a noticeable decrease in the trust placed by consumers in large corporations. These things, when coupled together, create the perfect atmosphere for blockchain start-ups looking to change the industry.

Peer-to-Peer Trading Platforms

One particular application of decentralized technology is the use of Distributed Energy Grids (DER’s) or independent renewable energy sources (like solar panels) that link together to provide alternatives. What happens is that end-users can trade excess energy they produce themselves among other participants in the grid, which can be conveniently installed among communities and small municipalities. Units of energy can be tokenized and stored on a blockchain, which can be bought and sold using dedicated tokens.

This technology has the potential to induce a greater economic potential for both energy companies and consumers within the energy market. By making electricity a tradeable commodity on the blockchain, end consumers would be able the benefit from the many unique aspects of blockchain commerce that make it so desirable in the first place (transparency, low fees, etc.).

There already have been a number of practical experiments in this area. The energy firm LO3 was one of those with their Brooklyn Microgrid project in New York. The company used a blockchain powered mobile app to handle data on solar energy generation, consumption as well as facilitating a P2P exchange among a small community of 50 participants. However, this trading is taking place through US dollars, rather than using dedicated tokens. Which brings us to the next point…

Dedicated Energy Tokens

While on that topic, one innovation that large energy companies can use is to begin implementing dedicated tokens or cryptocurrencies as a means of purchasing energy not only between their customers and themselves but also other energy companies as well. Several utility companies have already begun pilot projects to permit these transactions. Marubeni Corporation (MARUY), a Japanese conglomerate, already accepts cryptocurrency payments in some parts of the country.

However, the use of these smaller microgrids that allow casual trading of some spare kilowatt hours is drastically different from larger, institutional energy systems that operate alongside hundreds of millions of participants. From a technical perspective, it’s much easier for these types of blockchain solutions to operate on a local, community-by-community basis rather than a provincial or federal level. One example is Bankymoon, a South Africa-based blockchain start-up partnered with crowdfunding company Usizo to enable cryptocurrency payments for bitcoin-compatible meters located in rural, remote areas.

Conclusion

There are dozens if not hundreds of crypto-projects that are hoping to bring blockchain technology into the energy industry, and while there are many benefits to tokenizing the industry, there is still much that needs to be done before a large-scale change takes place in the market. However, the next few years will see a plethora of new small-scale, do-it-yourself platforms for communities and individuals to provide their own energy solutions.

Traditionally conservative companies have become increasingly open to blockchain technology throughout 2017, a trend that is continuing well into 2018. With the financial markets and blockchain projects alike jumping on the ICO bandwagon, the subsequent emerging popularity of this once backwater market has done a lot to increase the credibility of these token offerings to the public at large.

Fortune 500 companies such as IBM, Oracle, and Microsoft are among many others that have bravely dived into this world. Even back in 2016, IBM invested over $200 million in a new Munich office dedicated to intersecting blockchain technology as well as artificial intelligence, according to Coindesk. But even major companies such as these are mere drops in a pond in comparison to the growing interest from government bodies and regulators looking to get involved in this industry.

With all this in mind, the world of blockchain development has been changing rapidly and many ambitious crypto-projects have jumped into this world. With it, the demand for blockchain and bitcoin developers has skyrocketed, as well as the need for blockchain payment solutions and project development experts.

Here are a few of the most significant past and coming developments that have or promise to change up the blockchain development market.

Smart Contracts

In a basic sense, a smart contract is a small auto-executing program that is stored and runs on a blockchain. Although they can involve actual contracts, the term “smart contracts” is a little deceptive since they don’t necessarily involve any legal agreements. More often than not smart contracts automatically execute pre-programmed actions once certain requirements are met. When combined with the many benefits blockchain technology brings, including the security from a distributed system, fast execution speeds, etc, smart contracts are a promising application for many ICO’s out there in the market.

Tasks such as releasing a digital asset (such as a certification) once payment has been processed to releasing crowdsourced funding once multiple variables have been met are just some of the practical applications of this technology. The ability to store and execute programs on a blockchain is what makes smart contracts so attractive to developers.

Developers who specialize in programming smart contract code have become increasingly popular, but it’s worth mentioning that projects that seek to code their own contracts need to be careful. Since what goes in the blockchain stays there, it’s almost impossible to alter any errors. Bugs can’t be patched once the code is added to the blockchain, which makes smart contract development highly risky.

Internet of Things (IoT)

Among the various applications and fields that blockchain technology can be applied to, many experts believe that this technology can help solve some of the problems in successfully implementing the IoT.

The idea behind IoT is that it essentially is an extension of the internet communication protocol to include every electronic device on the planet. This extensive hyper-connected network of devices, vehicles, clothing, and other components can interact with each other and exchange data similar to how Bluetooth devices communicate. The idea is that this will facilitate an era of machine-to-machine (M2M) communication without the need for humans to interfere with manual inputting of data.

One area that many stakeholders in the IoT development world are worried about is the potential security issues for the multitude of devices connected to such a network. Current enterprise security systems aren’t able to handle the demands that a hypothetical IoT would place on them, hence the need for alternative solutions.

Blockchain can jump into this area thanks to it’s decentralized, tamper-proof nature. According to the report from the International Data Corporation, by 2019 20% of all IoT deployments will have some basic level of blockchain services enabled. Cryptocurrencies built on the blockchain would be perfect for automating micro-transactions that might occur between machines.

Although it’s a highly futuristic concept, the IoT is coming around sooner then most of us anticipate, and the blockchain development world will need to be ready to adapt to this application.

Artificial Intelligence

The ongoing quest to create artificial intelligence has been going on for a long time, with developments in modern computing propelling this field of study even further. AI is essentially an algorithm that lets machines create functions that they were not originally programmed with. Even the most seemingly complex computers still work within the confines of their programmed algorithms, but a successfully implemented AI would finally allow machines to “learn” for themselves.

Before this can happen, however, there are several problems or conditions that need to be met for AI to safely develop – conditions that blockchain technology can finally help solve. First off which is the need for massive quantities of data. In the field of statistics, the reliability of any study or conclusion increases as the sample population gets larger. In the same way, for AI’s to make sound decision making they need large quantities of data as an input. Unfortunately, it’s economically difficult to acquire this data unless you happen to be a large tech company with sophisticated data mining operations. Blockchain, however, can create a secure environment for big data owners, as well as smaller, independent data providers (even as small as the individuals themselves) to sell this data to AI developers.

The other major concern behind AI algorithms is making sure that their decision-making process is reliable and secure. Blockchains transparency allows for analysts to see every data input that went into the algorithm, allowing us to see exactly how a conclusion was formed – whether correct or incorrect. Blockchain technology can also ensure safeguards are kept on our private information thanks to smart contracts. These contracts can restrict information distribution only once proper securitization procedures have taken place.

Conclusion

In the end, blockchain developers and the various crypto-projects jumping into the marketplace are going to need to recognize that these developments are only going to become more prominent in the months as years to come.