Cleantech Market Intelligence
Could Bitcoin Really Cut Electric Bills?
The idea seems far-fetched at first, using Bitcoin’s foundational virtual currency technology to reduce your electric bill. But upon further study, the notion has a certain appeal.
The idea springs from a group of Accenture technologists in France who have created a smart plug based on Bitcoin’s blockchain transaction database system. For currency, Bitcoin uses an automated ledger called a blockchain that processes deals through a private network of computers with shared software that verifies and publicly tracks where coins are spent. A key piece of Bitcoin’s technology is a cryptographically signed acknowledgement (essentially a receipt) that verifies a transaction among all players. Traditional accounting has a debit and a credit, producing a double-entry bookkeeping system; with Bitcoin, the cryptographic receipt adds a third element, becoming a sophisticated triple-entry system.
Back to the smart plug. The Accenture device would adjust electricity consumption minute-by-minute and use blockchain functionality to shop different rates and sign up for a lower fee if it finds one. In essence, the plug has an embedded smart contract working on the owner’s behalf. So far, Accenture’s plug is merely a proof of concept, though it could be employed, for instance, to help lower-income customers pay for their energy. According to Accenture’s research, in aggregate, these customers in the United Kingdom could conceivably save more than $919 million per year.
Other Smart Contracts
Expanding on this idea, a smart meter or a number of electrical devices beyond a plug could have an embedded smart contract and provide whole-home energy cost benefits to consumers. Also, the concept would seem to fit neatly into the expanding residential Internet of Things (IoT) trend, a market that is explored in some detail in a recent Navigant Research report.
This is a potentially disruptive technology. Customers could theoretically avoid dependence on a single electricity supplier, though a new player, such as Google or Amazon, could eventually emerge and dominate a system dependent on Internet transactions and the IoT. This would assume, of course, that electric utilities and regulators would agree to such a scheme, which is not likely in the near- to mid-term. How many utility operators would easily welcome a decentralized system in which they could lose—or gain—customers from moment to moment? Not many. Nonetheless, the blockchain idea could give consumers new advantages and bring about more decentralized energy grids. Really.