Blockchain Technology Coming to a City Near You

There’s a lot of chatter about blockchain, cryptos, initial coin offerings and the like these days.

And I’ll admit I’m part of that.

But with good reason.

The potential changes to the financial and commercial system are huge. We’re talking changes of epic proportions.

Potentially…

There’s not so much tangible evidence to point to yet, though. And a lot of the benefits are still at the conjecture level.

They’re not in the real world.

A non-bitcoin holding sceptic might reasonably ask the question, ‘But what’s happening right now that affects me?’

Well, the residents of Fremantle, Western Australia could be about to find out soon…

Over the next two months, Power Ledger is about to roll out a proof of concept in Fremantle.

It’s the first step in turning Fremantle into a ‘smart city.’

And blockchain is key to this ambition.

As you might know, Power Ledger was the first big Australian foray into the world of Initial Coin Offerings. Or ICOs, as they are commonly known.

Under guidance from Australian listed company Digital X [ASX:DCC], Power Ledger raised over $34 million this October in return for 1 billion POWR tokens.

These are the cryptocurrencies that support the Power Ledger project. And they’re available for anyone to buy.

So, what is the project all about?

And how’s it turning Fremantle in Australia’s first smart city?

From Block Tribune:

‘Power Ledger is a start-up that aims to use blockchain technology to create a peer-to-peer renewable energy network, trading units of self-generated solar power to energy retailers, who in turn broker it out to utilities.’

In other words, it’s an energy trading platform without the middle man.

Remember, cutting out the middle man is central to what blockchain technology is all about.

Imagine a future where your solar panels on your roof can actually create an income stream for you.

As battery and renewable technology evolves, a connected energy market might just be the long-term solution to the problems we are seeing in energy markets right now.

Here’s how it works. 

The Power Ledger project

Power Ledger uses a software solution that measures the amount of electricity consumed or generated.

The way the energy moves from one person to another is via a unit called ‘Sparkz’. This is a digital representation of the energy that moves from the buyer to the seller.

Founder Dr. Jemma Green said

Basically, Power Ledger has a software solution and it connects to smart metres. It reads the outputs of the metres in terms of electricity that is being consumed or generated and it records that on the blockchain.

As somebody purchases or consumes electricity that is also recorded on the blockchain and those two pieces of information from the transaction for which Sparkz are transferred — so it happens synchronously. The actual recording of the electricity is the movement of Sparkz from the buyer’s wallet to the seller’s wallet.

This means that the buyer is receiving the payment for the electricity at almost the same time the seller receives the payment for the energy.

This all happens via the blockchain.

Once the seller receives the Sparkz into their digital wallet, they can convert those to Australian dollars.

POWR token holders benefit through demand for the platform. Or even by using their tokens to buy fractional ownership of renewable energy assets Power Ledger buys in future.

This could create income streams for token holders. And if the system works, the value of POWR tokens could rise too.

It’s a very interesting concept.

Blockchain and smart cities

The Australian government just granted the Power Ledger company an $8.25 million grant to roll out the project in Fremantle.

According to Power Ledger:

‘The trial will involve highly resilient, low-carbon and low-cost systems installed and connected using blockchain technology. A large solar photovoltaic (PV) plant, rooftop solar PV panels, a precinct sized battery, an electric vehicle charge station and precinct water treatment and capture systems will be orchestrated using blockchain technology and data analytics, and demonstrate the interconnected infrastructure of future smart cities.’

Curtin Institute Professor Greg Morrison said the plan is to develop a smart metering, battery storage and blockchain trading system.

This would allow energy and water efficiencies between critical dispersed infrastructures that would otherwise have required physical co-location.

In other words, this new technology makes the previously impossible, now possible.

Blockchains are real.

They are coming.

And they will change whole industries, just like Power Ledger is seeking to do with energy.

It’s not just about trading asset differently.

It’s about enabling new methods of business. Simply put, blockchains make a lot of industries better.

Like any new technology there’s an adoption curve. It seems slow at first, before growing so rapidly that it seems to take off in all sorts of ways at once.

Given the problems in energy markets, this novel solution in Fremantle could be an inspiration for the rest of the country to follow.

And in my opinion, this tech-led innovation is exactly the kind of thing Australia should be getting behind as we compete in the new, decentralised marketplaces of the 21st century.

Good Investing,

Ryan Dinse,
Editor, Money Morning


Ryan Dinse is an Editor at Money Morning.

He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur.

With an academic background in economics, he believes that the key to making good investments is investing appropriately at each stage of the economic cycle.

Different market conditions provide different opportunities. Ryan combines fundamental, technical and economic analysis with the goal of making sure you are in the right investments at the right time.

Ryan's premium publications include:


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