One Year In, and Nobody Has Deployed Blockchain at Scale in Energy
Omega Grid is demonstrating that blockchain technology is useful for helping people and utilities save on their electric bills by facilitating new energy markets.
In case you missed the screed, “Ten years in and nobody has come up with a use for blockchain”, Kai Stinchcombe’s argument is that blockchain architecture is no good for solving existing problems and the only proven uses are currency speculation and illegal transactions. His story is not a productive contribution, however, the closing paragraph rings true:
“In conversations with bitcoin entrepreneurs and investors and consultants, there was often a lack of knowledge or even interest in how the jobs were being done today or what the value to the end user was.”
The understandably skeptical and cautious conversations with our utility and industry partners has only expanded our view of the potential impact for blockchain technology. We value these challenging conversations and we always receive the gift of a new perspective on pressing problems or approaches we had not yet considered. Thank you to everyone who has engaged with us over the last year. Here is a quick review of what we have heard.
Few proof points
The progress of blockchain implementations is falling behind the level of attention that the technology is receiving. The only way to address this is through execution. We are focusing on technical implementation with our project at the Stone Edge Farm in Sonoma, CA that has been live since August, 2017. We announced the first distribution level blockchain transactive energy project in October thanks to our partnership with Ameren. We know the competition is hot on our trail and working alongside our partners is the best way to move the industry forward.
Inefficiencies
We often hear a concern around the amount of wasted electricity (essentially useless computer work) being used by many blockchain implementations. Bitcoin, the most well known blockchain project, prioritizes decentralization and resilience as a trade off for computational efficiency. We designed the Omega Grid blockchain solution to avoid unnecessary calculation overhead when managing their grid market participants. Conversely, we are using the computational effort of the Omega Grid blockchain to help solve complex electrical grid equations useful for the operation of a local electricity market.
Omega Grid helps lower electric bills, improve resilience, and increase efficiency by encouraging people to invest in local energy resources.
Concern over the ICO model
ICO’s are certainly changing the way companies receive early funding. There are many caveats with this new method for raising capital. The most glaring are issuances with unproven business models and no accountability. Aside from potential securities law infractions, there is another looming question.
What happens to your startup when you have to pivot because your token promises utility in an area where you cannot deliver?
Sorry to be a wet blanket here, but when failed promises turn speculators into angry investors, we see the new market for ICO class action lawsuits heating up in 2018. After being assessed taxes on funds designated as future revenues, discovering that the enterprises targeted to acquire your tokens are unwilling, or the inevitable “punch in the face” of taking a product to a consumer market, we expect to see companies wasting valuable time dealing with these existential issues. That brings us to our final thought.
What are your ecosystem incentives?
There is a silver lining of increased awareness for a new way of designing platform ecosystems. The smartest people I know are putting significant effort into testing and designing their models. The ones who write a white paper before validating with customers and partners will not survive. We don’t think ICO’s are inherently bad - on the contrary, we believe they will prove to be a transformative force for global platform ecosystems. In closing:
We are most excited about working with our partners to design the incentive structures that create beneficial feedback loops.
Stay tuned to learn more about how Omega Grid and our partners are designing new ways for utilities and their communities to work together.
Clickbait title credit to: https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100 by Kai Stinchcombe
