In 2019, more market players than ever — utilities, grid operators, energy companies, software developers — are inching closer to commercial blockchain applications in the energy sector. As they do, an important debate is emerging: Should private blockchains (such as Hyperledger or private Ethereum networks) or public blockchains (such as Ethereum or that of the Energy Web Foundation) form the basis of any energy blockchain technology stack?
Three key attributes can characterize every blockchain, for the energy sector and beyond:
Pure public blockchains, such as Bitcoin, allow participants to take all three actions, provided they have enough computing power. Pure private blockchains, such as Hyperledger, restrict access in all three scenarios to a defined set of participants. Blockchains such as the Energy Web Chain are something of a hybrid: the chain’s initial design allows any device or user to read and write transactions but restricts who is allowed to maintain network integrity. In the case of the Energy Web, only identified, trusted energy market participants approved by the network’s governance model serve as validator nodes.
This approach intentionally trades a modicum of decentralization in exchange for improved performance and regulatory compliance; the result is essentially a public blockchain that offers some of the more compelling attributes of a private network.
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