Blockchain-enabled energy trading could help lower carbon emissions but efficiency and privacy issues must first be overcome.
Whereas most blockchain relies on proof-of-work processes, Power Ledger employs something called proof-of-stake. The former consumes vast amounts of energy as it involves solving ever-more complicated mathematical equations, but proof-of-stake blockchains are based on pseudo-random chance.
“It uses the fraction of energy of conventional blockchain. Proof-of-stake is ideally suited for energy,” Martin says.
One of the leading critics of blockchain’s energy-consumption backs the approach. Michel Berne, the director of economics studies at Telecom management school in Paris, has been highly critical of the carbon footprint of blockchain, but he thinks, for energy markets at least, proof-of-stake could be a solution.
“Yes, I believe that proof-of-stake blockchain applications can validly compete with other non-blockchain based solutions in energy trading,” he says.
“Peer-to-peer energy trading is nascent, notoriously difficult to manage and blockchain solutions might be useful.”
He questions whether proof-of-stake could completely phase out proof-of-work blockchain in other sectors however, as he is unconvinced it offers the same level of security that is the point of blockchain in the first place.