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Ethereum Co-Founder Joseph Lubin: Blockchain Will Be Most of the Economy in 10-20 Years

Ethereum co-founder Joseph Lubin said that he expects blockchain to be most of the global economy in 10 to 20 years.

Ethereum (ETH) co-founder Joseph Lubin said that he expects the global economy will be 10 times larger in 10 to 20 years, when blockchain is fully ramified, and blockchain will be involved in most of it. Lubin made the statement at the SXSW conference in Austin on March 14.

During the same keynote, Lubin also pointed out that just as nowadays there aren’t many “normal” people using blockchain-based systems, “there weren’t a lot of ‘normal’ people firing email around in 1983.”

He also reiterated the promises of Ethereum 2.0, stating that there are a lot of inefficiencies present in Bitcoin (BTC) and the current version of Ethereum that Ethereum 2.0 won’t have:

“In Bitcoin and currently in Ethereum, you need to have specialized hardware, burn lots of electricity, waste lots of computation, to basically keep everybody in sync. [With Ethereum 2.0, in 18 months] we’ll have a blockchain system much more powerful and scalable that uses orders of magnitude less energy.”

As Cointelegraph recently reported, Lubin also said that blockchain technology and decentralization can benefit content creators and journalists.

The statements mentioned above are also in line with what Lubin said in November last year, when he told a New York Times interviewer that with blockchain, society will move “from a scarcity to an abundance mindset.”

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Expert: Renewable Energy Not Enough for Bitcoin’s Sustainability Problem

A PwC blockchain expert states that renewable energy is insufficient in addressing Bitcoin’s massive energy consumption.

Renewable energy will not solve Bitcoin’s (BTC) sustainability problem according to a blockchain specialist at Big Four auditing company PwC, Alex de Vries. De Vries presented his argument in a study published in sustainable energy journal Cell on March 14.

The research cites estimates from de Vries’ website, according to which Bitcoin consumed anywhere from 40 terawatt hours (TWh) to 62.3 TWh throughout 2018. According to the paper, this is on par with the energy consumption of countries like Hungary (40.3 TWH) and Switzerland (62.1 TWh).

De Vries quotes research published in 2014 that estimates that the energy consumption of the entire finance sector could be as high as 650 TWh of energy per year. Still, de Vries points out that this includes data centers, bank branches and ATMs. Bitcoin’s energy consumption estimate only considers mining and not Bitcoin ATMs and trusted third parties such as exchanges, wallet providers and payment service providers.

According to the cited data, the world’s data centers consumed about 194 TWh in 2014, and they are expected to increase by about 3 percent (to 200 TWh) by 2020. Bitcoin mining facilities purportedly use at least 20 percent (40 TWh) of this capacity.

De Vries also notes that the carbon footprint of a Bitcoin transaction outpaces that of a traditional non-cash banking transaction. He states that, in such a context, Bitcoin consumes 491.4 kWh to 765.4 kWh per transaction, while a traditional non-cash transaction has a carbon footprint of 0.4 kWh. This puts Bitcoin’s annual carbon footprint between 19.0 to 29.6 million metric tons of CO2.     

The research concludes that Bitcoin’s large energy costs and externalities like the rapid replacement of mining hardware, mean that renewable energy is insufficient in addressing Bitcoin’s energy problem.  

Instead, de Vries suggests that alternatives to Bitcoin’s energy-hungry Proof of Work (PoW) mechanism like Proof of Stake (PoS) can prevent “both extreme energy use as well as the incentive to develop specialized (singular purpose) [ASIC] hardware.”

In December 2018, Ethereum (ETH) co-founder Vitalik Buterin claimed that future blockchains with sharding based on PoS will be “thousands of times more efficient.”

In May 2018, Alex de Vries published an article called “Bitcoin’s Growing Energy Problem,” in which he claimed that Bitcoin’s network would use half a percent of the world’s energy by the end of that year.

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Major UK Energy Company Acquires Stake in Blockchain Firm Electron

U.K. energy supplier OVO has announced a strategic investment in blockchain energy technology company Electron.

Major United Kingdom energy company OVO has invested in blockchain firm Electron through its recently launched technology division, Kaluza. The development was announced in an OVO blog post published on March 12.

Kaluza —  an intelligent grid technology company that provides software and hardware products to the energy sector — has reportedly made an investment in Electron, a London-based energy tech company that uses blockchain technology. The move aims to facilitate Electron’s deployment of distributed energy trading platforms.

Electron will purportedly use the proceeds of the investment to develop its energy platforms and systems, or its distributed flexibility marketplace. “The development of Electron’s shared asset register will be crucial to supporting the growth of Kaluza and deliver on its mission to securely connect all devices to an intelligent zero-carbon grid,” the post explains.

The new investment from OVO is reportedly the first since Mitsubishi acquired a 20 percent stake in the firm. OVO is reportedly the seventh largest energy supplier in the U.K.

Blockchain has seen multiple applications in the energy sector globally. Earlier in March, Thai petroleum refining firm Bangchak Corporation Public Co. Limited (BCP) began testing a blockchain-based energy trading platform and commercial microgrid. The platform will support the basic electricity needs of an average BCP fuel station in addition to generating, distributing and storing energy for neighboring shopping mall tenants.

Last month, Japan’s solar power supplier Kyocera partnered with LO3 Energy to test blockchain-based virtual power plants (VPP) for improved energy distribution. The test will allow the companies to evaluate the the feasibility of VPPs that promote low-carbon use without fuels or carbon emissions based on peer-to-peer distributed consensus network.

According to recent research from Infoholic Research LLP, the global blockchain in energy utilities market is expected to grow by 60 percent by 2024. The market was assessed to be $210.4 million in 2018, and is expected to reach $3.4 billion by 2024. Infoholic Research predicts the growth at a compound annual growth rate of 59.4 percent from 2018 to 2024.

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Thai Petroleum Company Tests Blockchain Energy Trading Platform

Petroleum refiner Bangchak Corporation Public Co. Limited is testing a blockchain-based microgrid at one of its stations in Bangkok.

Thai petroleum refining firm Bangchak Corporation Public Co. Limited (BCP) is testing a blockchain-based energy trading platform and commercial microgrid, distributed energy news site Microgrid Knowledge reports on March 7.

BCP is testing the new platform at a shopping mall attached to one of its fuel stations in Bangkok. The new system will purportedly combine 280.9 kW of commercial rooftop and canopy solar photovoltaics with 913 kWh of lithium-ion, nickel-manganese-cobalt oxide and 92 kWh of lithium-iron-phosphate battery energy storage capacity.

In other words, the microgrid generation and distribution platform will support the basic electricity needs of an average BCP fuel station in addition to generating, distributing and storing energy for shopping mall tenants.

The Green Community Energy Management System (GEMS) is “an experimental sandbox system” that will run on the Ethereum (ETH) blockchain. BCP reportedly aims to see whether the GEMS can be applied to its network of fuel stations across the country.  Wuthipong Suponthana, the managing director of Leonics — the firm that designed the system — told Microgrid Knowledge:

“Our customer, Bangcheck Petroleum Co., wants their people to gain know-how regarding the design and implementation of microgrid systems, as well as know-how regarding the operation of microgrids as a business. Energy storage systems’ costs are coming down, and they want to be ready to implement these systems.”

Microgrid Knowledge states that the new system will allow GEMS users to save on electricity costs and simultaneously reduce pollution, which is a public health concern in Bangkok.

The Thai government has been active in supporting the development of decentralized technologies and cryptocurrencies. In January, the National Electronics and Computer Technology Center (NECTEC) developed a blockchain solution for e-voting. According to NECTEC, once 5G is eventually adopted, all votes will be connected with the new technology.

In February, the Thai National Legislative Assembly voted to allow the issuance of tokenized securities on a blockchain. Once the changes come into effect later this year, tokenized stocks and bonds can be officially issued on a blockchain.

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Gulf Region’s Burgeoning Renewable Energy Sector Should Leverage Blockchain, Experts Argue

Blockchain can make the infrastructure of new renewable energy markets across the Gulf Cooperation Council more secure, the exec noted.

Blockchain can make the infrastructure of new renewable energy markets across the Gulf Cooperation Council (GCC) more secure, resilient and cost-efficient, experts from United States-based tech consultancy firm Booz Allen Hamilton have said. Middle East business news site Al Bawaba reported the news on March 4.

The GCC —  a regional political and economic union that includes all the Arab states of the Persian Gulf, except Iraq — reportedly aims to install 80 gigawatt (GW) of renewable energy capacity across its six member states by 2030, set to account for over half of the union’s existing conventional capacity.

In light of a global target to generate 50 percent of the world’s energy from renewable sources by 2050, Booz Allen Hamilton — which reported almost $5 billion in revenue in the first three quarters of fiscal 2019 — isolated blockchain as the most effective technology for meeting the considerable technical, governance and institutional challenges ahead.

Dr. Adham Sleiman —  vice president at Booz Allen Hamilton, Middle East and North Africa — argued that the renewable energy sector is particularly well suited for the technology, as its system is a transactional one (electricity and fares) that currently relies on a central authority (utility operators), Al Bawaba notes.

With the rising popularity of distributed energy resources (DER), this structure is already tending toward greater intrinsic decentralization, according to Sleiman. He said:

“DER are changing the landscape; we are moving towards a more decentralised grid, where utilities no longer fully control the system. Utilities now need to look beyond energy delivery. Blockchain applications can help with enabling P2P energy trading, tracking renewable energy, and articulating smart contracts.”

According to Al Bawaba, the vice president continued to argue for the potential of transactive energy concepts that are well suited to blockchain innovation, which he identified as “a major disruptive change that the energy sector may face within the next 10 years.”

Rafael Mateo, a senior associate at the consultancy firm’s Dubai office, noted that both the Dubai Electricity and Water Authority (Dewa) and the Dubai Roads and Transport Authority (RTA) have both already been piloting blockchain and smart contract solutions.

For the energy sector as a whole, Mateo proposed that the implementation of tracking tools — such as the issuance renewable energy certificates to track energy flows — are an important precursor to full-fledged automation and decentralization.

As reported this January, major Spanish energy firm Iberdrola has begun using blockchain to monitor and track the sources of sustainable energy with an open source blockchain platform from the Energy Web Foundation (EWF). In November, the EWF had onboarded two units from German tech giant Siemens to promote the decentralization of the energy sector.

In Asia, South Korea’s largest power provider KEPCO is set to use blockchain to develop an eco-friendly microgrid, and Singaporean utility firm SP Group launched a blockchain marketplace to trade solar energy last fall.

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Major South Korean City to Build Blockchain-Enabled Virtual Power Plant

South Korea’s government will spend $3.5 million to set up a blockchain-enabled virtual power plant in the city of Busan.

South Korea’s government will spend 4 billion Korean won (KRW) (about $3.5 million) to set up a blockchain-enabled virtual power plant (VPP) in the city of Busan. The development was reported by South Korean newspaper Yonhap News Agency on Monday, Dec. 10.

Busan, South Korea’s second most populous city after Seoul, has announced that the city administration has selected a project to support an innovative energy industry in the region by building a VPP based on a citizens-shared blockchain.

The project will be reportedly represented at the national competition in 2019 hosted by the largest electric utility in South Korea, Korea Electric Power Corporation (KEPCO).

By its definition, a virtual power plant is a cloud-based distributed power plant that integrates the idle capacities of multiple energy resources in order to optimize power generation.

The recently announced blockchain-powered VPP project is set to aggregate such power sources as Busan area factories and public facilities of energy storage system (ESS), as well as solar power plants.

The project was reportedly proposed by the city of Busan, as well as major local companies and institutions including Pusan National University (PNU), energy management firm Nuri Telecom, Busan City Gas and real estate firm Korea Industrial Complex Corporation.

The city of Busan has already been actively developing and promoting blockchain technology, according to Korean crypto-focused news agency TokenPost.

Earlier this year, Yoo Jae-soo, the Minister of Economic Affairs in Busan and former director general for financial policy at the Financial Services Commission (FSC), reportedly held a meeting to discuss the establishment of a special zone in the city in order to build a friendly environment for the development of the blockchain and crypto industry.

In June of this year, South Korean governmental agency, Industry-SW ICT Convergence Association (WICA), also revealed plans to establish a blockchain center in Busan modeled on Switzerland’s Crypto Valley. According to the plan, the South Korean version of Zug’s Crypto Valley is set to be located at Haeundae, an affluent and touristic beachfront space in eastern Busan.

Earlier today, the country’s second-biggest commercial bank, Shinhan Bank, launched a blockchain-based initiative within the internal processes of the institution in order to reduce the number of human errors in record keeping.

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Austrian Blockchain Center for Multidisciplinary Research Established in Vienna

The Austrian Blockchain Center has been established in the city of Vienna, where it will collaborate with local academics in multidisciplinary research.

The COMET Centers, which are coordinated by the Austrian Research Promotion Agency (FFG), have approved the Austrian Blockchain Center (ABC) in Vienna, according to a Nov. 29 press release.

ABC involves 21 scientific institutions, 54 companies, 17 associated participants, and 16 international institutions and companies. According to the release, the research center will be multidisciplinary and focus on Internet of Things (IoT), finance, energy, logistics, and applications in public administration.

Alfred Taudes, academic director and coordinator of the center, and head of the Research Institute for Cryptoeconomics at WU Vienna University of Economics and Business, said that a multidisciplinary approach is “necessary for comprehensive research.”

The center will conduct research and development in five different areas; cryptography technology and security; cryptoeconomic modelling and blockchain applications for business; emerging industries and blockchains in manufacturing; data science methods for blockchain analytics and predictions; and legal and political implications.

The new research center will purportedly work in tandem with other COMET Centers and international blockchain initiatives. The centers are funded by the Austrian Ministry for Transport, Innovation and Technology, and the Federal Ministry for Digital and Economic Affairs. ABC will also receiving support from the provinces of Lower Austria and Vorarlberg.

The Austrian government has been proactive in its support for blockchain initiatives and development of the technology. In September, the government set to offer a $1.35 billion bond on the Ethereum blockchain. At the time, Austria’s Finance Minister, Hartwig Loeger, said that the ministry is considering blockchain tech as it forms a “focus on economic policy.”

Earlier this month, the Austrian government supported a U.K. cancer research company that uses blockchain in its work. Lancor Scientific, which has developed a device to detect multiple types of cancer, records screening results with smart contracts on a blockchain. The firm plans to open a research laboratory in the Austrian city of Graz.

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Energy Firm ENGIE Partners With Consulting Firm to Create Blockchain Software Offering

French energy group ENGIE has teamed up with consulting firm Maltem to establish a blockchain software offering geared toward commercial clients.

French electric utility company ENGIE and consulting firm Maltem Consulting Group have jointly established a blockchain development firm designed for commercial customers, according to a press release published September 7.

The new project called Blockchain Studio received seed funding totalling €1.9 million (around $2.1 million). Blockchain Studio has created a software suite for commercial enterprises comprised of two fundamental tools. One tool is focused on the development of smart contracts and enables its application by users without technical background. The other tool manages the creation of cloud-based or server-based blockchain infrastructure.

According to the announcement, the company is planning to roll out its services primarily on the Asian market at the beginning of 2019, with an office in Singapore. By the end of the first financial semester of next year, Blockchain Studio will also open operations in Southern Europe.

Yves Le Gélard, ENGIE’s Executive Vice-President and Chief Digital Officer expressed enthusiasm towards the new project:

“We are very pleased to be contributing to this development, which should allow Blockchain technology to be made accessible to many actors. It is an excellent example of an innovative tool contributing to ENGIE’s digital transformation.”

ENGIE has previously explored blockchain applications in its energy business. In July, the corporate research center of the ENGIE Group, ENGIE Lab CRIGEN, signed a Memorandum of Understanding with the IOTA Foundation. The collaboration is focused on the exploration of and experimentation with IOTA Tangle technology in the energy sector.

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U.S. Senate Hearing: ‘Valuable’ Potential Applications of Blockchain in Energy Sector Exist

The U.S. Senate has held a hearing on the energy efficiency of blockchain and similar technologies, according to an announcement published August 21.

The hearing on energy and natural resources, held by the U.S. Senate Committee in Washington, DC, focused on the application of blockchain and related technologies, as well as the cybersecurity possibilities of using such technologies in the energy industry.

In particular, the committee considered the issue of the possible increase in electricity prices following the rising power demand in blockchain applications. The hearing also touched on the

methods of evaluating whether blockchain can improve the cybersecurity of the computing systems used to supply energy.

Among the speakers, Thomas A. Golden, program manager at Electric Power Research Institute (ERPI), reported that the institute’s research on blockchain and its capabilities led to several pilots that have demonstrated potential promise in the deployment of blockchain to enable transactive energy.

ERPI established a Utility Blockchain Interest Group (UBIG) consisting of almost 40 energy companies in order to raise awareness and provide information about the technology. Additionally, the institute has launched the development of a blockchain-based energy market simulator.

Claire Henly, managing director at Energy Web Foundation, addressed the problem of the energy usage of Bitcoin and similar networks while also outlining that there are “valuable potential applications of blockchain in the energy sector.” As per Henly, blockchain can render energy markets more efficient and open, while there are still some critical issues that should be solved before blockchain can contribute to the energy sector at scale.

Arvind Narayanan, associate professor of computer science at Princeton University, contributed with his perspective on the potential draws of the new technology, arguing:

“A blockchain-based market might be more attractive than a centralized trading platform if market participants are averse to a single company controlling the platform. Other initiatives enable customers to directly trade electricity with each other in a ‘peer to peer’ fashion, for example, by buying and selling excess rooftop solar power. However, peer-to-peer trading still requires the cooperation of utilities who ultimately control the physical flow of electricity.”

Speaking about cybersecurity, Narayanan said that blockchain brings the potential benefits of tackling the risks to the cybersecurity of energy systems, pointing out that “policy makers should view it as one of several possible technical tools for addressing energy cybersecurity.”

At the end of July, the chairman of the U.S. Commodity Futures Trading Commission (CFTC) Christopher Giancarlo spoke about his agency’s interest in blockchain tech during another Congressional hearing, underlining the need for appropriate measures to be enabled that would allow the CFTC to consider blockchain tech implementation in the future.