How Swytch is using Proof of Production to Drive Renewable Energy Adoption

Dwight Sproull

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swytchX

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4 min read

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Jan 24, 2018

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I was at a crypto-financing conference in London this past July, and one of the speakers offered up the most important question anyone should ask when getting into blockchain projects: Why should I hold this token? With 1,450 tokens and growing, it can be difficult to answer. Many complex systems could benefit from the standardization and verification that block-chain technology provides, but how does a project differentiate itself? Swytch is doing something radically different, and it’s called Proof of Production.

Swytch has applied block-chain technology to one of the great issues of our time; renewable energy production. The Swytch Energy Token (SET) is an ERC20-compliant utility token that drives value for Swytch Token holders by incentivizing renewables through validating production data via the Proof-of-Production protocol. Proof-of-Production is a novel concept in that it reduces computational and energy requirements for validating data and transactions. Compare Proof-of-Production with Proof-of-Work … the original method of verifying transactions and creating new tokens pioneered by Bitcoin and copied by many other blockchain projects. Proof of Work has proven to be incredibly destructive environmentally due to the extremely high energy consumption required to solve the cryptographic puzzle that locks each block of transactions into the chain. Proof-of-Work is the opposite of sustainability, and finding a better solution is what spurred the founders of Swytch to begin developing the Proof-of-Production model.

Expanding renewable energy production is a popular initiative in almost every country on the planet, and many individual city, state, and regional governments have experimented with incentive systems to encourage adoption. There have been fragmentation issues with these systems, and a lack of standardized verification has hindered the transition to renewables on a global scale. Swytch aims to solve this problem by being the first company that will capture data directly from the edge devices at the point of production. Swytch has partnered with Berkshire Cloud to secure the devices and their data, ensuring that the data begins on the blockchain and stays on the blockchain, which drastically reduces the ability of malicious actors to alter the data. With clean data flowing through a central “oracle”, companies, governments, and individual producers can always verify exactly how much assets are producing in a given location and time. This data will provide deeper insight into production efficiency and allow the “oracle” to determine where to build the most impactful assets. This will make it much easier to make better investments and create smarter policies.

The “oracle”” is a Dynamic Adaptive Control Module (DACM) that sits at the heart of how Swytch tokens are awarded, from small residential solar panels, to large-scale wave power and wind farms. Tokens also serve as a value-growth mechanism for conscientious consumers looking to take advantage of REC programs: sustainability-minded homeowners, corporate sustainability programs, or “smart cities”.

Swytch’s Proof-of-Production model is currently engaged in a large-scale pilot that will prove out its scalability. The vision is that massive solar arrays in California or the vast expanses of wind farms in Texas will be using the same technology as an individual homeowner who is running a set of panels on their rooftop. While the economics of scale will of course mean that the large producer is awarded more tokens, the rate at which they’re awarded will not be disproportionate. This is a rather profound departure from Proof-of-Work systems, where it hasn’t been economical for an individual with comparatively small resources to mine Bitcoin for the past four years or so. Instead, users who can link massive numbers of specialized ASIC computer processors near cheap sources of electricity are in a much better position to solve the encryption algorithms faster and thus win the newly minted tokens that come with finalizing a new block in the chain. This requires an enormous amount of electricity though, even with newer processors that are much more energy efficient than the ones from a few years ago. Rather than powering homes, hospitals, factories, schools, or street lights, this energy is essentially a net loss from an environmental standpoint. Proof-of-Production is far more elegant than the brute force economics of Proof-of-Work, and is beneficial to the environment. By encouraging renewable energy producers to do what they were already planning to do, which is to create a more sustainable energy market, Swytch is able to create new tokens as a reward mechanism while maintaining the nodes necessary to run a decentralized ecosystem.

Our world requires an answer to the energy question. Swytch fills a gap in the energy market, creates incentives for renewables investment and thoughtful consumption, and drives the transition to a more equitable and sustainable future. Join us and contribute to our shared future.

If you’d like to speak directly with the Swytch team and community, join us on our Telegram channel.