Blockchain, Smart Sensors, and Off-Grid Electricity

A Case Study in Blockchain Documentation

We’ve written before about the four essential features of blockchain — documentation, tokenization, governance, and trading. In this article, we’ll take a look at some of the practical, if unconventional, uses for documentation in real- world use-cases.

Very simply, whatever you document on blockchain will be there forever, unchangeable.

What is documentation?

Often called distributed-ledger technology (DLT), blockchain is essentially a timestamped, sequential record of data, the sum of which represents the current state of that data. These records form the cornerstone of cryptocurrency transactions, for example, and can secure various other (financial) transactions. But this feature can also be used for any case where data needs to be forge and revision proof. Very simply, whatever you document on blockchain will be there forever, unchangeable. You can read more about how this forge-proof documentation is a cornerstone feature of blockchain technology here.

Documentation and smart sensors

Something revolutionary happens when we combine this un-forgeable, unbreakable sequential record with a secure automated record maker, such as a device with a sensor. For hundreds of use cases, this combination opens up incredible opportunities, for example in cases such as supply chain and logistics tracking, or in sustainable agriculture. The data fed by the sensor onto a blockchain can be anything, from geolocation data to temperatures, moisture, weight, and even electric current and voltage information. Data by itself is already a valuable good, but when we combine this with a tamper-proof accounting mechanism even more interesting cases can benefit. Let’s take a look at a case that has become popular in recent years — off-grid electricity generation.

Blockchain documentation for decentralized electricity

Most electrical grids around the world are operated by a central authority. One of the reasons, of course, is to ensure network stability and reliable accounting because there is only one party supplying and many parties buying. This means it’s easier to measure how much each recipient consumed in order to ensure that the grid can handle demand, and so the utility can bill/tax users correctly. In addition, there’s also organic transmission line loss that occurs naturally in the grid itself that needs to be accounted for. All this information is important for seeing just how much a specific installation generates or distributes, a vital part of the grid operator’s business plan and necessary to ensure that everyone’s lights stay on.

In recent years, however, we have started to see the rise of decentralized grids. These are largely made up of photovoltaic (solar) installations. Without moving parts, they are easier to maintain than wind turbines, and the total cost of ownership is well within the means of normal households. These solar installations have become increasingly popular, particularly in rural communities, and give private parties the ability to generate their own electricity to supplement (or replace) the main grid. In some jurisdictions, these parties even have the ability to sell excess energy they don’t use back to the main grid, a process called net metering. But a big difficulty here has always been the accounting.

Co-operative accounting

Let us take, for example, a rural community that gets together to set up enough solar panels to power their farms, and make a bit of money selling the excess power back to the county grid. This makes them both producers and consumers. Naturally, you wouldn’t want to set up an expensive solar installation without being compensated for it, either by being both the receiver and sender of energy, or by getting monetary compensation. So, both for their own knowledge and for the county grid, they need to know exactly how much power is being created, how much is being used by each member of the co-op, and how much is being sold to the grid. For compensation purposes they could, for example, receive an energy token, which can be spent on something else, e.g. food in a community, or as a coupon for a fiat payment from the county utility. There is also the possibility to just use this as a certificate for a certain amount of clean energy produced, which could form the basis of a carbon offset token/credit, or something similar. As with every decentralized installation, if counter-party trust is removed, one has to introduce different means to make sure people don’t cheat. Of course, they could also just receive a check from the local grid operator.

Blockchain-based documentation is perfect for accounting in these types of cases. Because it grows linearly with every new block, and because you can’t replace a block once it’s part of the chain, every block has an unforgeable timestamp. Transactions, such as creating a record on the energy production/consumption of nodes within a grid, go to one specific block. In other words, they share the timestamp of this particular block. Any additional payload, such as the amount of energy in question etc., can very comfortably stored in a separate location. Only the fingerprint of the data, the file hash, needs to go on blockchain.

There is a catch, however. Blockchain by itself doesn’t know how to account for energy production/consumption in a grid; it needs additional hardware and some software to connect the ends.

Blockchain-enabled smart sensors

To accomplish this, we need a secure sensor with the ability to read and write to a network, as well as to perform some basic cryptographic tasks. Ideally, the sensors would be based on a programmable platform. Essentially, we need a smart sensor. This piece of equipment must be accredited by the network and is built in such a way that it stops recording if the integrity of the device is breached. The sensor obtains its data e.g. from a PV installation, an AC converter, etc. and generates a corresponding record on the blockchain.

The data is signed with the accredited sensor’s private key and submitted to blockchain. The string of records created by it is proof that it is continuously online and performs its task. Fluctuation of recordings can be flattened, and indications of problems can be given by AI analysis in real time.

When do these sensors record data? In our example, the most valuable information is the amount of energy created by the attached solar installation (can also be a wind turbine or anything else for that matter). Unfortunately, this factors in the time as a parameter. In other words: It doesn’t make sense to create a record every few seconds. The blockchain wouldn’t be fit for it anyway, as this creates a bottleneck. It would be totally fine if e.g. the sensor generated a record every 10 minutes and then reset its internal counting mechanism, so it actually records increments.

What does it record? In the case of power generation we essentially need the following information:

• Amount of energy
• Local time of recording (in case it takes some time for the record to be written to the blockchain)
• Time interval
• Statistics data
• Current data
• Average data over the time interval

Additional data might be needed for specific purposes or additional aspects of tracking the installation (e.g. monitoring panel health).

What about missing information? It could in theory happen that some records do not make it to the blockchain for any number of reasons. The node could be offline, etc. In such a case, there are several ways in which the data can still be securely updated without compromising the integrity of the chain. For example, the string of events that did make it to blockchain, say 95%, can be used to fill in the missing data based on stochastics. The sensor could also just keep accumulating data until it can successfully write it to a block. The confirmation from the blockchain client back to the sensor is important, though some sensors could also check whether the transaction is confirmed or not. These are all examples of how historic, unchangeable records and their timestamps on blockchain can help to reconstruct any data that is missing.

Blockchain documentation is a secure bridge

Hopefully, we have demonstrated that a fairly simple and realistic combination of a smart sensor and an inherent blockchain feature, documentation, can securely and automatically document the accounting statistics for a decentralized electrical grid.

But there are so many other instances where a combination of smart sensors and blockchain documentation can change the way we interact and do business. A similar system could be used to monitor carbon capture sites in a paid or crowd-funded sustainability initiative. It could also be used to securely relay information from the physical world into a metaverse environment, for example weather information or 3D-scans for real estate and collectibles. We’ve even written before about the utility of a blockchain enabled smart lock system for homes and businesses like multi-access storage units or rental properties. All in all, this combination of smart sensors and blockchain documentation is a highly effective, practical, and flexible one that can be used by businesses of all kinds as they digitalize.

At CoreLedger, we believe that blockchain is a practical technical solution to improve and solve a wide variety of issues across industries and sectors, which is why we try to cut through the hype and focus on real-world applications, not just what’s technically possible.

CoreLedger’s mission is to help businesses of all sizes quickly and affordably access the benefits of blockchain technology. From issuing a simple token to enterprise-grade token economy solutions, we have all the tools and components you need to quickly and affordably integrate blockchain into your business whether you’re a new startup or a big multinational enterprise.

Interested in our results-focused, real-world approach? Then visit our website for more information, or get in touch with us directly to discuss your project.