Unlocking the blockchain dilemmas facing utilities
Blockchain brings some immense opportunities to the utilities market. A good number of use cases are widely acknowledged with various consortia and startups progressing towards their realization.
Households and companies can, for instance, produce solar energy and sell it to the grid during the day then consume from the grid overnight. Electric cars and advances in battery technology make distributed private storage feasible.
Blockchain will give an immutable record of what you produce, store, and consume without needing an independent regulator to guarantee accurate billing. It brings transparency and trust in the data coming out of smart meters, putting prosumers in control.
But while blockchain has much to offer, it also brings with it new ‘digital dilemmas’ the likes of which utilities have never seen before.
Let’s begin by looking at immutability. Once you have stored information in blockchain, it remains there unaltered and indelible forever. It’s how blockchain increases trust.
Immutability improves agility and overcomes inertia by diminishing organizational risk. Both parties can trust each other is doing. Agreements and operations can be done at a more junior level and without involving costly third-party fees.
But blockchain’s immutability could cause inertia in the future. What is acceptable today may not be acceptable in the future; seemingly trivial actions may have unseen repercussions. But you can’t alter or hide anything on blockchain.
Consider smart meter data, for instance. Algorithms are emerging that can deduce with a reasonable level of certainty that a given spike corresponds to a specific appliance. It’s not a huge leap to detecting models and makes, profiling users, and even tracing a family that has moved house from their energy consumption patterns. If you share smart meter data in an immutable format, what else could be done with it further down the line?
If you recognize the dilemma at the design stage, you can build around it. We could evaluate what we publish and revise those guidelines periodically. We could embrace transparency and acknowledge the need to own our mistakes down the line. Or we could inject nonsense data to deliberately destroy patterns that might appear in our data or metadata.
A single identity held in blockchain
My second dilemma is around using blockchain to manage an individual’s single identity, bringing together your driving license, academic qualifications, fishing license, job history, tax returns, and much more. With so much information is in one place, what if someone hacks it?
While blockchain encryption and game theory make it extremely resilient under stable conditions, advances in technology (especially quantum) or significant distortion in the user base or underlying economics can expose vulnerabilities. A hacker could find out more about you than you intended. They could impersonate you or even control you. And if someone did something in your name, it would remain as a black mark against your name forever.
Utility companies are a potential gateway to blockchain digital identities that could enable the pseudo-anonymity that would allow individuals to do financial transactions without revealing who they are. They would need to consider how they would deal with impersonation. If you recognize the dilemmas at the design stage, you can build around it.
Inequality brought by blockchain
My last dilemma is inequality. Examples of how blockchain could help overcome inequality are commonplace, helping bank the unbanked, for instance, or providing an alternative in areas of hyperinflation.
But blockchain could also deny some people access to services, specifically where services require a mature identity stored in blockchain for proof of who you are. Where does someone who has no identity on blockchain start? They could be denied access to bank accounts, government services, and more. You can imagine cycles where vulnerable people who are already in energy poverty can’t get access to energy deals. And with no deals, they find themselves getting even deeper into debt.
This third dilemma can also be dealt with if we recognize it at the design stage. We can build in features to allow people with no identity in blockchain to use a different way to prove their identity and gain access to the same services.
I hope you’ve found exploring the digital dilemmas blockchain might bring and approaches for dealing with them useful. Our latest Journey 2022 ‘Resolving Digital Dilemmas’ report, researched and written by the Atos Scientific Community, discusses more of E&U’s emerging digital dilemmas and the strategies to resolve them.