BTC-ECHO in conversation with the Forschungsstelle für Energiewirtschaft e.V. (Research Centre for Energy Economics). The energy industry is often cited as an industry that could benefit immensely from blockchain technology. At the same time, criticism is growing of extremely energy-intensive mining processes such as those used at Bitcoin. BTC-ECHO author Phillip Horch has signed an agreement with the Forschungsstelle für Energiewirtschaft e.V. (Research Centre for Energy Economics). (FfE) on how blockchain and energy sector are compatible with each other – and what challenges lie ahead for the still young technology.
Bitcoin mining is repeatedly criticised for consuming a lot of energy and for being highly polluting. The underlying blockchain technology, on the other hand, offers advantages that can be advantageous for the energy sector.
What contribution can research make to bringing the energy sector and the Bitcoin secret closer together?
Blockchain technology as infrastructure and Bitcoin secret platform technology can form the basis for a large number of applications like this: Is Bitcoin Secret a Scam? Beware, Read our Review First The first and most prominent example is Bitcoin. In our project, however, we are only marginally concerned with the topic of Bitcoin, since its applications in the energy industry are extremely small. The problem of the massive energy demand of the Bitcoin blockchain certainly poses a special challenge with regard to its ecological consequences. However, thanks to alternative consensus mechanisms, the problem of high energy consumption can be solved depending on the blockchain design and application.
In the context of the energy industry and especially in our project we focus on the chances of technology, new developments and the optimization potentials in a digitalized energy supply. Our recently published technology report will provide the basis for this.
What challenges do you see as groundbreaking developments in blockchain technology for the future?
Blockchain technology is already capable of guaranteeing data integrity, manipulation security, reliability, high availability, transparency and pseudonymity in digital processes. For applications in the energy industry, requirements regarding transaction speeds and costs as well as data protection are of particular relevance. It is to be expected that new developments will improve user-friendliness, create interoperability and drastically reduce the energy consumption of public blockchains through alternative consensus mechanisms. Even if the concepts could in principle be transferred to other protocols, there is still a lack of standardisation. An examination of current further developments shows that the technology is subject to an enormous innovation push, but is sometimes fragmented and many different blockchain protocols exist. The focus of many developments is on different goals. These are sometimes multi-layered and aim primarily at the large limitations in terms of scalability, interoperability and anonymity.
Keyword standardization: Do you think regulation at the national level would be sensible here?
Standardisation is conducive to broad application. The fact that the topic is also taken up at national level in the standardisation committees is certainly helpful in this respect. The Bundesverband Blockchain is already successfully demonstrating this. In future, however, standardisation will also have to take place with regard to technology. In the energy sector in particular, it is necessary to fall back on verifiable and uniform standards. As already mentioned, in our understanding the blockchain is a platform technology that benefits from efficiently linking a large number of participants and users and offering easy access.