As several struggling companies have proved recently, adding the word “blockchain” to the company’s name lights a rocket under the stock. Recall Long Island Iced Tea and, more recently, Kodak.
What does blockchain mean? Well, to echo Humpty Dumpty’s words to Alice, it means whatever one chooses it to mean — “neither more nor less.” In its basic sense, the blockchain was a decentralized, immutable store of information related to certain transactions. The blockchain also claims to reduce third-party risk by eliminating intermediaries, such as banks, whose role was to provide (centralized) trust in the system — trust is replaced by immutable data that is not controlled by any party.
Combined with a digital currency like Bitcoin or any other cryptocurrency (token), the goal was the creation of a transaction clearing system independent of banks that can never be corrupted because nothing can ever be changed. That may be a worthy goal, but the reality is that the system is an energy hog (if not quite the hog that some reports make it out to be), it’s slow, and transaction costs continue to escalate.
How does this all play out in the energy sector? In late October, GreenTech Media published a story on 15 “blockchain-based” energy companies, some of which have generated funding by initial coin offerings (ICOs). Among these firms, Grid+ raised $125,000, 570.5 Bitcoin and 94,070.8 ether in a token sale last November.
Grid+ is developing a hardware and software product to create a secure Ethereum-enabled gateway and to connect Internet of Things (IoT) devices. The hardware gateway is an Internet-enabled, always-on appliance that securely stores cryptocurrencies and processes payments for electricity in real time. In other words, a consumer could set the washing machine or dishwasher or some other household appliance to run when electricity costs are at their lowest and pay the bill — again in real time — with Ethereum tokens.