Blockchain and the Evolution of Digital Interaction

As time progresses the applications for Bloackchain technology continue to increase.  For a refresher on Blockchain, check out my colleague Paul Lamer’s post “Blockchain: What You Need to Know to Know if it’s What You Need.” Decentralization is one of the biggest buzzwords in the blockchain universe. Smart Contract has taken this concept and applied it into the field of finance, thus developing Decentralized Finance, or “DeFi”. While the most basic principles of cryptocurrency allow you to essentially be your own bank, Smart Contracts allow you to be your own “Banking Services”. In other words, Smart Contracts help you exchange anything of value in a transparent, undisputable way, all while avoiding the costly services of a middleman. Here is an example of how this concept could play out in a real-world scenario: Say you are buying a car using a Smart Contract with the seller. This transaction could go two ways: If you are not able to provide the funds/collateral requirements by the contract date, the data for the car (DMV records, title, etc.) would be returned to the seller. If you are able to meet your requirements before the contract date, the funds and vehicle data would remain in the contract until the date requirement is met. Once met, the property would be distributed to the purchaser and seller. This simple concept is helping drive forward a financial revolution where people can lend out their money in a way that is more cost-effective for the borrower and more lucrative for the lender. Decentralization in the Energy Sector Another facet of Decentralization comes in the form of energy. In our modern world, renewable energy has become cheaper and more accessible for millions of residential households. Coupled with battery storage, this in and of itself is a revolution. However, this just the tip of the iceberg. As more people gain access to solar, a Distributed Energy Resource (DER) within a Virtual Power Plant(VPP) is created. With the utilization of smart contracts, people with solar panels can sell their energy to those without. This power can be transferred using the existing powerlines. Over the last couple of years, this concept has gained major traction and has begun to be implemented. Tesla and AEMO, for example, created one of the largest Virtual Power Plants, established in South Australia. In December of last year, the VPP propped up the grid during a coal outage. New technology successes propagate more innovative technologies. In this case, the VPP victories led to Tesla releasing its Autobidder platform in May. This platform dispersed the idea of their VPP technology to the consumer level, creating benefits for the sellers and buyers in the energy market. According to the Forbes article, “Tesla’s Autobidder Platform Is One Example Of A New Energy Future”: “Autobidder is a transactive energy platform that uses machine learning, predictive analytics, and automated interactions with market operators and regulators to generate revenue from power and energy services with minimal overhead. The combination of DER and automated platforms produces benefits for asset owners and at the market level. Autobidder has been in use at the Hornsdale Power Reserve (with the Neoen-owned Tesla Big Battery) in Australia for several years, where it has reduced systems costs and exerted downward pressure on prices. Hornsdale’s flexibility saved an estimated A$14 million ($10 million) across Australia’s various markets during a single islanding event in 2019 and saved customers more than A$50 million ($34 million) over its first year of operation.” So, how does this platform tie back to Blockchain? The Energy Web Chain. Created by the Energy Web Foundation, the Energy Web Chain is the “World’s First Public, Open-source, Enterprise-grade Blockchain Tailored to the Energy Sector”. This chain is used for developers to write smart contracts and dApps (decentralized apps). The transactions are validated on the Energy Web Validator Network, comprised of some of the largest global energy companies, and exist within their blockchain ecosystem. The company, Grid Singularity — which helped develop the Energy Web Chain — has promoted Tesla’s Autobidder platform. While this technology may be emerging, is it moving into every aspect of our lives — from financial services to the energy in our homes. This change may seem slow at first, but market movers are leaning into this Decentralized Revolution and development will continue to bring efficiencies at a blinding speed. This year alone, DeFi has seen explosive growth, from $500 million in March to around $4.22 billion in August of total valued. This is a 744% growth in just a few short months. Brace yourself, changes are coming. It is best to research now to find new and innovative projects. Familiarize yourself with the coming shift and how it may be used to your advantage. In what ways can these digital developments work for you?

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what is blockchain

Blockchain: What You Need to Know to Know if it’s What You Need

Author: Paul Lamers Given the recent amount of change COVID-19 has introduced, just about everyone should be looking at how they can innovate to stay ahead. In times when everything is up in the air, there is a lot more opportunity to cast aside preconceived notions or latent assumptions and explore new ways of getting things done better. That is why many companies are now looking at how they can better adopt, integrate, and utilize emerging technologies, one of which is Blockchain. And, like most technologies, all you need is a basic understanding of how Blockchain works in order to know if it is something you could leverage for your organization. At its most basic level, a Blockchain is a system of a record called a distributed ledger. A distributed ledger records transaction data simultaneously across all participating instances, called nodes. It is similar to a decentralized database, where data is stored on multiple computers in distributed locations. However, a decentralized database still has some type of administrator or controlling function. This leads to one of the key differences between the two systems. All the computers on a decentralized database trust each other (i.e. the security of the data is provided by the controlling function), whereas those on a distributed ledger do not (i.e. the security of the data must be provided by the framework of the system itself). The way most current Blockchains maintain their data integrity is through a concept called proof of work. Basically, each block on a blockchain holds transactional data along with a hashtag which ties it into the chain directly connected to the preceding block. Neither the information in the block nor the place in the chain can be altered unless the parties trying to change it controls 51% of the computing power in the chain. It is a consensus-driven network of computers which grows more secure the larger it gets. Additionally, Blockchain technology took a leap forward in usability when the concept of embedding code into the blocks was introduced on the Ethereum chain. This is what enables the establishment of smart contracts within a blockchain, and greatly increases Blockchain’s use cases. Smart contracts are automated contracts which will take a specified action or set of actions once the established conditions of the contract are met. For example, if a musician were to put their music on a blockchain under a smart contract, they could dictate their royalties and streamline the payment process for using their music by removing third parties and automating the process (here are some of the real-world examples).  And the number of additional potential applications is ever-expanding, to include use cases such as currency, peer-to-peer economies, asset management, voting, and supply chains. However, the technology of Blockchain is still in its early stages and has some issues to overcome before it can be more widely adopted in all its possible applications. For example, the proof of work method takes a lot of computing power and verifying new blocks across an entire network where only one block can be added at a time is relatively slow for some applications. But, these are problems that are already being addressed by concepts such as replacing proof of work with proof of stake (security is provided by distributing ownership instead of computing power), or rethinking the blockchain referencing protocol to improve scalability (like IOTA and RedBelly are doing). Given these improvements, the number of applications on the horizon for blockchain are countless, from managing an IoT network to managing distributed supply chains at the sensor level. So how can you determine if investing in blockchain is right for your organization? Consider these two questions: Do multiple parties need to have read/write access to a shared database? Do these parties trust each other? The first question is addressing the underlying nature of what a Blockchain is. If your organization operates in a way in which a single party is solely responsible for generating and manipulating data in your database, then there is no tangible benefit to moving your data over to a Blockchain. In fact, it will likely be less efficient than the current database solutions on the market today. However, if your organization requires multiple parties to generate data in a shared data set, the critical question to answer is if they trust each other. And by trust, I am referring to the potential for participating parties to have diverging interests. If there is an advantage to one party not providing data to another within a network, or providing inaccurate data, then there is the potential for diverging interests between the parties and they would not inherently trust each other. In this case, Blockchain technology is worth further exploring to see how your organization could leverage the innate security and transparency benefits it […]

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