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US Congress

US Congress report points to blockchain potential in the energy sector

August 13, 2019 at 3:00 PM | By Jit Sutradhar Blockchain

The scientific service of the US Congress has examined the opportunities and challenges of decentralized technologies for the energy sector. According to parliamentary scholars, the blockchain could lead to groundbreaking changes, especially in the operation of power grids. At the same time, researchers are examining the high power consumption of mining farms. To get this under control, the report advises Congress to introduce efficiency standards.

Whether it’s about the climate killer Bitcoin or the blockchain as the savior of smart, green grids – much has already been discussed about the opportunities and hurdles of decentralized technologies in the energy sector and many pilot projects have already been initiated.

Especially in the US, the development of state-subsidized green technologies is advancing these days. At the same time, the electricity consumption of domestic miners shoots up. The prices follow. It is therefore only a matter of time before the state steers such developments into controlled channels and uses the advantages for itself.

To prepare a future legislative framework for the use of blockchain technologies, the most recent report from the Congressional Research Service is dedicated to the topic of “Bitcoin, Blockchain and the Energy Sector”. On the one hand, the scientific services of the US Congress summarize the current debates for the MEPs. On the other hand, the scientists are considering legal answers in order, among other things, to regulate the exploding electricity requirement.

Compared to the general use of distributed ledger technologies, they are sure:

Advanced applications of the blockchain may [in the future] bring about drastic changes for the energy sector.

As possible starting points of the technologies, they are exploring the operation of so-called micro-grids and the related peer-to-peer energy trading, which could cover the electricity consumption of individual households by the solar energy of their neighbors. Instead of vertically organized electricity production centered on electricity companies, Blockchain solutions could become a decentralized organized electricity grid in the future.

Acting with your neighbor Solar Power – decentralized power grids should make this possible

Corresponding pilot projects such as an initiative of the New York start-up LO3 Energy have been testing this option for Blockchain for years. Together with Siemens, the company enables residents of the Brooklyn district to trade their solar power together.

At the same time, such decentralized networks would not only bring advantages. According to the report, they would increase competition between producers and make supply more efficient and transparent. At the same time, smart grids and the associated storage of sensitive data in decentralized databases could also open the door to cyber attacks, the scientists point out.

On the part of the congress it is now necessary to clarify the regulatory powers of the state energy authority FERC with regard to blockchain usage. At present, there are no state and legal standards for their use with regard to data protection, the connectivity of technologies and the market structure. This vacuum would have to be filled.

The Everlasting Discussion: Climate Killer Bitcoin?

As a major stumbling block to Blockchain, the Congressional Report also highlights to MEPs the extent of current mining activity – both in the United States and around the world. The parliamentary service has estimated that bitcoin mining and blockchain technology currently consume as much as one percent of American electricity.

According to studies, around 16 percent of the world’s mining farms are currently operating throughout the United States. Here, the prospectors in the far north to the Canadian border. If one believes competing assessments, should be up to 30 per cent of the world-wide mining farms in Washington State alone.

In the face of these figures, the scientists point to future problems and bottlenecks in the area of ​​power supply. For some municipalities, for example, astronomical consumption could overload existing networks. On the other hand, the high demand could cause electricity prices to skyrocket as a result.

As an example, the report mentions the case of Plattsburgh . In the small town in the US state of New York mining enterprises have increased the annual electricity bills of private households last by an average of 300 US dollars. The municipality responded last with a settlement stop for mining companies.

Mining companies rely on green electricity

But from a global perspective, the high power consumption is relevant. So Bitcoin & Co. could actually become a climate killer.

The energy consumption associated with Bitcoin could potentially generate enough CO2 emissions to raise global average temperatures to two degrees Celsius over the next 30 years,

The researchers cite a study from last year. In the longer term, however, sustainability concerns could be a “temporary problem”.

Not least in order to counteract criticism, mining companies around the world are currently increasingly focusing on low-cost green electricity from hydro, solar or wind power. That’s why more and more international miners are moving to Nordic latitudes these days . In addition, companies are waving next to a climate that makes it easier to cool the turbines, in some cases even tax advantages and politically stable framework conditions.

Just last week, Bitcoin company Blockstream announced plans to open one of the region’s largest mining centers in the state of Quebec , Canada . In addition to institutional investors such as banks and large companies, private individuals should also be able to rent here in the future.

Despite these sustainability trends, environmental concerns remain with regard to the other side of the Pacific, and thus to the world’s mining global market leader. For example, the Chinese government has also pledged to reduce its emissions. However, much of the electricity in the Middle Kingdom still comes from coal.

Report advises Congress delegates on efficiency standards

Finally, with a view to future legislative responses, the report advises Congressmen to introduce energy standards for mining hardware. For example, the equipment might consume only a certain amount of electricity. That the Ministry of Energy will comply with the proposal, however, is unlikely, at least in the near future. For there are currently no such guidelines for computer products. For refrigerators, on the other hand, such standards already exist.

However, in the future, a government-sponsored commitment to power-saving and energy standards from private data centers could make a difference. For state institutions such regulations already apply. In turn, general guidelines could make an important contribution to reducing the energy consumption of bitcoin and blockchains.

Image via Shutterstock

This article is translated by Google Translate from btc-echo.de

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