Accelerating Innovation through Convergence - Buildings, Energy and Blockchain
Why we believe that decentralized technology and convergence can enable new propositions along the value chain of both energy and buildings
In the Innovation Hub, we are always looking for synergies between our investment focus areas. Lately, the teams of Smart&Connected and Machine Economy have stuck their heads together and found how the two areas can be impacted by each other.
But first, here comes a short recap of what the two areas focus on:
- In Smart&Connected, we tackle the major shift of what we call IoT Transition. With around 50 billion energy consuming devices, an ever increasing number of transactions & and the need for interconnectivity, we invest in startups that help turning buildings into smart organisms.
- In Machine Economy, we analyze the financial, trust and ownership transition e.g. from fiat to programmable money, cryptocurrencies, the token-economy and new, decentralized funding models (ICOs). We invest in decentralized technologies (mostly middleware/enabling layer solutions) that can turn devices into smart agents.
Smart&Connected can be seen as a vertical investment space, while Machine Economy has infrastructural and enabling components for several industries and use cases. We strongly believe that we can leverage our experience in both spaces by investing across convergence.
Thus, we have created two paradigms to identify the building blocks for a decentralized future and thereby, the best investments for our portfolio:
1. What if the energy market becomes decentralized, tokenized, open-sourced, smart, connected and in parts autonomous to an energy utility of today?
In general, there are four common major trends influencing the energy sector: decarbonization, decentralization (of energy generation), democratization (of generation and freedom of choice) and digitization (on all levels).
We see the energy system moving away from centralized generation and distribution and retail only shared among a few big players towards a smart energy system, where prosumers, storage systems, service providers, smart home systems and smart charging poles will enhance and shape the energy experience of how we know it today. Ultimately, the energy system will transform into a collaborative, open-sourced, tokenized ecosystem. In this newly decentralized autonomous energy ecosystem, energy is a tokenized digital asset that can be transacted between prosumers, consumers and machines (electric vehicles, buildings, etc.). This ecosystem integrates real-time flow of power, information and value as energy transactions are carried out in a complex decentralized economy.
We support this future picture with investments in the blockchain space, enabling the financial transactions and relationships among devices.
2. What if decentralized, smart, connected and autonomous agents/machines would become the future customer of an energy utility?
If we enable devices to do more transactions (semi-) autonomously, how can we ensure security and integrity on the transactional layer? Can those challenges be solved utilizing decentralized ledger technologies, and, which building blocks are missing to match the “old” world with new technology?
As you can see (bottom right of the chart above), autonomous buildings are one part of our vision for the future of the energy sector. The Smart&Connected team is driving the transformation of buildings as we know them today into autonomous buildings, which will be part of the Internet of Digital Twins: Buildings will be autonomous, smart organisms that improve the human experience, and optimize resources (e.g. energy) that the building uses and produces. These smart organisms will be a part of a smart city — interconnected with other players of a decentralized economy.
So far, so good, but how does this all fit together?
We strongly believe, that blockchain and startups of our Machine Economy portfolio can help enable PropTech/ConTech (Property and Construction Technology) being “interconnected with other players of a decentralized economy.”
The global smart cities market is forecasted to jump from $529.55 billion in 2017 to $1944.67 billion by the end of 2023, which gives enough room for innovations!
Three good examples, where the topics of Machine Economy and Smart&Connected converge, are:
- Cryptowerk* provides a digital trust engine, that simplifies and accelerates the development of blockchain-enabled applications for the enterprise. With a “smartstamp”, companies can securely record, store and retrieve digital hashes that verify the integrity of transactions. This solution could be used to track and trace transactions of devices, as well as doing audit and claim management for smart buildings.
- weeve* builds a global network where IoT devices are enabled to autonomously buy and sell data based on blockchain technology. With the aid of Weeve, smart buildings could unlock their data potential.
- slock.it* combines blockchain with IoT, bringing transparency, security and auditablity to real-world objects. By creating the Universal Sharing Network, Slock.it will “form a financial Internet where machines can not only sell and rent themselves, but also pay for each other services”. In the PropTech space, one could imagine a building paying humans (or robots?) to do the cleaning autonomously.
These are just three cases - we are looking forward to seeing many more ventures popping up in the space. A good chance to get to know more of them is the PropTech innovation award, hosted by our partner GTEC Center.
We are excited to embark on the convergence journey and support more building blocks of the future through our portfolio approach.
💐 Thanks to… the Machine Economy and Smart&Connected teams!
📖 Further recommended reading about the Convergence theory between AI, blockchain and IoT of Outlier Ventures can he found here.
👏🏼 If you enjoyed reading this piece leave us a clap or comment below. We are curious to hear your thoughts!
🤖 We are the Machine Economy and Smart&Connected teams of the innogy Innovation Hub and believe in a future that is decentralized and enabled by machine-to-machine transactions and autonomous buildings.
📩 If you are a startup working on a blockchain, IoT or PropTech venture, please feel free to contact us!
*Disclaimer: We are invested in Cryptowerk. We are not invested in Weeve and Slock.it.
