As Britain today makes an historical announcement that, for the first time since the Industrial Revolution, UK is to have its first full day without coal power, it came to our attention a new Brooklyn blockchain based energy start-up is working with Siemens to test a microgrid for the sale of solar powered energy in the New York neighborhood.
They announced back in January that Brooklyn neighbors “are buying and selling solar power from each other” through a blockchain platform facilitating the documentation of all transactions.
According to Coindesk, LO3 Energy, the start-up in question, is using ethereum’s public blockchain in collaboration with ConsenSys, the ethereum based incubating powerhouse.
They allow individuals who have solar powered roofs to sell surplus energy to their neighbors, making the running of solar power panels more profitable, lowering electricity costs for neighbors, while also providing an extra energy source during blackouts. The release says:
“In view of the devastation caused by Hurricane Sandy in 2012, the project plans to install battery storage units within the grid in order to keep the lights on at least temporarily during the next storm-related emergency.”
The use of ethereum’s public blockchain for this sort of project is interesting on many levels, including, according to Siemens’, its ability to pinpoint potential problems as all is recorded in an unforgeable manner. The company says:
“It can ensure that users receive original replacement parts, because it can seamlessly retrace a part’s journey back to its origins with the help of an RFID chip and the blockchain – one of many potentially interesting applications for Siemens.”
One of the main criticisms against blockchain based currencies is their lack of backing, or utility, often expressed by asking who accepts the currency. Applications such as the microgrid or Chronicle’s use of ethereum to prevent fake goods, uses which can’t easily apply alternative methods, may provide that underlying utility, and thus stable demand, just as gold’s use in some manufacturing aspects or for jewelry provides some intrinsic value.
That may explain ethereum’s current transaction levels of some 80,000 a day, compared to around 4,000 for litecoin or monero and almost all other digital currencies. It is still far from bitcoin’s 250,000, but unlike bitcoin, which has been operating for nearly nine years, eth is barely a year old.
Its growth in transaction numbers is incomparable with any other digital currency, including bitcoin, which it far surpasses at equal timelines. If this continues, then the currency may attract an underlying value and a corresponding stability, which may make it useful for commerce as well as a real alternative to fiat currencies, potentially bringing to reality Hayek’s insight who, after studying money all his life, stated:
“The past instability of the market economy is the consequence of the exclusion of the most important regulator of the market mechanism, money, from itself being regulated by the market process… only competition in a free market can take account of all the circumstances which ought to be taken account of.”