More blockchain experiments that could unlock innovation
It’s barely the end of the first quarter, and 2017 has turned into a vortex of news related to the technology world’s favorite cause-du-jour, the blockchain.
And there’s more evidence than ever that the technology — which started life as the ledger system for managing bitcoin digital currency transactions — will have a broad range of applications for the world of corporate sustainability. Here’s a snapshot of several recent developments that bear watching.
A game changer for the grid and energy management?
Many factors have been holding back broader adoption of distributed grid applications. One is the absence of a system for managing hundreds of thousands of transactions and for underpinning "virtual power plants" that offer new ways for business owners to share energy resources.
Some advocates believe blockchain could be the answer, both because it doesn’t require a central authority and because it can help automate new applications — such as buying or selling electricity across a neighborhood, as is the case with the much-watched Brooklyn Microgrid project. It’s worth noting that technology powerhouse Siemens got involved late last year and is looking for ways to replicate what’s going on.
Equally noteworthy: in mid-February, the Rocky Mountain Institute teamed up with another blockchain software company, Grid Singularity, to create a more formal organization that is envisioning and championing potential applications for the power sector.
Among other things, the Energy Web Foundation’s mission is to help advocate demonstration projects and provide a leg up for the many startup developers cropping up to experiment in this space. Here’s some more information about its mission, from RMI principal Jesse Morris:
Even to blockchain experts, it’s still unclear exactly where the technology’s value lies and what the roadmap to commercial implementations looks like in the energy sector. Research organizations have identified more than 200 applications of blockchain technology. EWF will conduct detailed research and analysis on these use cases to identify exactly what blockchain technology can be used for in today’s electricity sector, how much economic value the technology can unlock, and what it will take for applications to be deployed at scale.
One thing EWF potentially will work on, for example, is a unified blockchain platform that could be used for these applications. Right now, most utilities experimenting with the technology are developing their own platform for this or building on one of the fast-growing public platforms, Ethereum.
Keeping track of carbon
The idea that the blockchain might play a role in managing carbon marketplaces is also gaining more credibility. In mid-March, tech giant IBM revealed that it’s working with a "green asset management platform" in China to help companies there manage data related to their carbon emissions reduction quotas. The country is slated to launch the world’s biggest cap-and-trade program later this year. The idea is that companies that exceed their national targets for reducing emissions can sell those credits to others that don’t.
IBM has been testing a system for managing and trading those credits along with an organization called Energy-Blockchain Labs. The two finished a proof-of-concept test late last year; a beta version of the platform will become available in May, and the commercial edition is expected in late 2017, when China’s carbon market opens.
"It is estimated that the platform will significantly shorten the carbon assets development cycle and reduce the cost of carbon assets development by 20 to 30 percent," enabling cost-effective development of a large number of carbon assets, said Cao Yin, chief strategy officer of Energy-Blockchain Labs, in a statement. "Blockchain technology is expected to become an important means for effective control of carbon emissions, which is of great significance to China, the world’s largest source of carbon emissions."
A new approach for tracing trees
The case for using blockchain to track provenance is a hot topic among supply chain experts. Catenaut, a Ruston, Louisiana-based consulting firm specializing in forestry management, thinks the technology also could prove useful in verifying the source of lumber.
Its system assigns an anonymous "token" to each load of wood delivered to a mill, using the global positioning information available on harvesters and combining it with certification information from a forestry compliance system. That identifier, which includes information about the forest of origination, is followed and validated using blockchain. In effect, it’s a secret audit.
"We’re taking technologies that are already commercially available. What’s new is that we’re combining them for new insights," said Catenaut founder and owner Jeremy Jones, a third-generation forester who has been searching for a more efficient and secure system for doing this.
Catenaut worked with Nuco, a blockchain specialist founded by several former Deloitte software gurus, to develop its application, Jones said. It’s not an insignificant investment: The starting cost to outfit 30 loggers would cost $200,000 depending on the information technology it was already using, along with an annual subscription fee of $20,000. Catenaut is discussing potential collaborations with several NGOs and is being considered by several businesses, including a German sawmill operator, Jones said.
Cars that own themselves
Finally, let us not forget that the blockchain was born to assist and secure digital currency. That could make it a very practical component of payment systems for "shared" property, such as autonomous cars, electric vehicles and other transportation resources. That’s the focus of a test program launched by Oxygen Initiative, a partner of the Germany’s biggest energy company — which also happens to be a big proponent of blockchain experiment.
Oxygen is testing a service called Share&Charge, an electronic wallet enabled by blockchain that could be used to manage fleet rentals or for enabling private electric vehicle charging systems to collect fees from drivers that need to charge their battery outside the range of a public network.
Here’s the vision, per Oxygen founder Stephen Davis:
We could see cars pay for themselves and handle simple transactions automatically. As an example, imagine letting an autonomous vehicle go into taxi mode while you’re at work and return when you’re ready to go home. With this e-mobility solution, the car could collect fares from riders and pay to charge itself for the commute home.
Davis admits it’s "still early days," but blockchain represents a real breakthrough when it comes to verifying "tiny little contracts in a point-to-point realm."
Oxygen’s scheme depends on its ability to get the attention of automakers, which would need to support the approach within the larger ecosystems of software and services that are emerging to control autonomous vehicles. "In terms of blockchain, they’re just barely waking up to how it can help them," Davis said.
Given the noise blockchain is generating, it’s doubtful the industry will be snoozing for long.