Blockchain — an opportunity for energy producers and consumers for low prices

In this transcript edition of The Interchange, we explain some confusing blockchain concepts.

WPP Blockchain — a global leading software platform for digital assets, a digital ledger designed to virtually record financial transactions, as well as everything of value. Originally created for Bitcoin, the blockchain technology is now looking for its other uses. Not all blockchain operations are about Bitcoin or some other cryptocurrencies. Blockchain has many other opportunities, such as smart contracts and other transactions.

WPP blockchain database is distributed across a network of computers, leaving no place for hackers. Its system is completely transparent, where all users can see the transactions and changes made on the public blockchains. That is why many industries are working on blockchain implementation into their sectors. WPP is taking full advantages of this outraged technologies and converted into a use to lower the cost of green power production to both private and public sectors.

Efficient peer-to-peer transaction platform… Blockchain is a special technology for peer-to-peer transaction platforms that uses decentralised storage to record all transaction data. The first blockchain was developed in the financial sector to serve as the basis for the cryptocurrency “Bitcoin”.

WPP Energy and its developers team leaders are innovating new applications have recently been emerging that add to the technology’s core functionality — decentralised storage of transaction data — by integrating mechanisms that allow for the actual transactions to be effected on a decentralised basis.

These mechanisms, called “smart contracts”, operate on the basis of individually defined rules (e.g. specifications as to quantity, quality, price) that enable an autonomous matching of distributed providers and their prospective customers. WPP Plans to focus on using the blockchain technology for lower price, and better service to both green power producers and consumers under one roof. The WPP Power Exchange Market… Read More…

Lower costs, faster processes and greater flexibility Blockchain technology changes the way we transact, with the underlying transaction model shifting away from a centralised structure (banks, exchanges, trading platforms, energy companies) towards a decentralised system (end customers, energy consumers).

Third party intermediaries, whose services are needed today in most industries, are no longer required in such systems — at least according to the blockchain theory — given that transactions can be initiated and carried out directly “from peer to peer”. This can cut costs and speed up processes. As a result, the entire system becomes more flexible, as many previously manual work tasks are now carried out automatically through smart contracts.

Current barriers hindering the implementation of blockchain applications In theory, blockchain systems no longer require either intermediaries or a central authority. Conflicts are to be resolved using “swarm” principles, i.e. based on the collective opinion of all parties involved. But it is still difficult today to put such models into practice.

In addition, there are a number of legal and regulatory requirements that blockchain projects must also comply with. In any case, the actual technology behind blockchains has not yet reached maturity and is therefore still being developed by our best developers in the green energy market for better service and better price to all.

Some level of maturity in financial services but concepts only in energy and other sectors An entire eco-system of companies has sprung up around Bitcoin that build on the virtual currency and its underlying technology. Other financial use cases of the technology are currently being developed and trialled by many major banks and start-up companies.

Other industries are only just starting out on blockchain development. Some start-ups are currently entering the market with blockchain projects. In the energy sector, a small number of pilot projects are trialling the technology, some of them funded by large energy companies.

In New York in April 2016, for instance, decentralises generated energy was sold directly between neighbours via a blockchain system for the first time. The goal is to establish a fully decentralised energy system in which energy supply contracts are made directly between energy producers and energy consumers (without involving a third-party intermediary) and carried out automatically.

Opportunities for prosumers Blockchain technology strengthens the market role of individual consumers and producers. WPP Energy company enables prosumers, i.e. households that not only consume but also produce energy, to buy and sell energy directly, with a high degree of autonomy.

The current legal and regulatory framework for consumers and prosumers in the energy sector is clearly defined and provides protection on many levels to consumers in particular. However, in the medium to long term, this framework will probably have to be adjusted to reflect the requirements of decentralised transaction models.

Wide range of energy use cases Blockchain technology shows a lot of promise. Other than being used to execute energy supply transactions, it could also provide the basis for metering, billing and clearing processes.

Other possible areas of application are in the documentation of ownership, the state of assets (asset management), guarantees of origin, emission allowances and renewable energy certificates.

WPP Blockchain technology has the potential to radically change energy as we know it, by starting with individual sectors first but ultimately transforming the entire energy market in an open market where consumers can choose their power suppliers for best best service and best prices, same as consumers does to choose from where and whom to consuming goods, or services without being forced by major utility companies paying high prices for power supply.