This is an opinion piece by Walter Kok, CEO of Energy web.
Three major themes we can expect for 2021: 1) Self-sovereign identity for users and assets, 2) Business adoption of open source blockchain technology, and 3) Global climate action. economy
As we collectively look at a very unexpected year 2020, it seems fitting that blockchain has had the biggest impact in the industry where it started: in financial markets. The financial world is changing rapidly and can no longer ignore digital cryptocurrencies. The evidence is simply overwhelming.
Many countries – from China and Singapore in Asia to Sweden and France in Europe to Saudi Arabia and the United Arab Emirates in the Middle East – are exploring all centralized banking digital currency equivalents (CBDCs) of their currencies. respective trustees. Crypto exchanges like Kraken are taking an unprecedented step in obtaining banking licenses. Decentralized exchanges overtake centralized incumbents (in August, for example, Uniswap overtook Coinbase Pro in trading volume). And in mid-December, Bitcoin hit an all-time high, rising to US $ 23,000 for the first time, this time mainly driven by big business interest.
Meanwhile, the “ free data ” model that has been around for years is coming to an end, and not just because of laws like the EU’s GDPR and California’s CCPA. Consumers are struggling with losing control over their own data as tech giants find themselves the target of legal action. In April, a US federal appeals court revived litigation accusing Facebook of violating users’ privacy rights by illegally tracking their Internet activity. In September, a coalition of Canadian provinces sued Google over a proposed class action lawsuit alleging the internet giant was collecting data without consent. In the same month, the Irish Data Protection Commission released a preliminary ruling to halt Facebook’s transatlantic data transfers.
As a result, self-sovereign identities powered by decentralized user-controlled credentials are on the rise in various industries, from the energy sector in which Energy Web operates to education to healthcare.
In this context, blockchain – and decentralized digital technologies in general – are gaining popularity as a powerful new tool to complement traditional corporate IT software. In particular, I see five emerging trends:
- Supplier lockout is complete. Companies no longer want to be beholden to proprietary systems with specific software vendors and potentially high switching costs. This creates too many dependencies on a single vendor, creates liability on customer data, and slows the pace of innovation.
- ‘Open-source ‘is the new mantra. Recent analyzes have shown that open source code is present in virtually every application on the market, sometimes making up more than half of the code base, even in proprietary applications. Open public networks based on open source software have a future.
- Consortia are formed to meet customer needs. From supply chain software and banking to our own energy web ecosystem comprising many of the world’s most influential energy companies and grid operators, industry consortia deliver solutions together – not in a private setting, but in a setting. open public that involves regulators and customers and suppliers.
- Blockchain has found its business niche: trust. The word “ trust ” (and “ no trust ”) is used a lot in blockchain circles, but it’s really the app that kills or the golden use case that companies are looking for. For example, in the energy sector, grid operators need to know and trust which assets are connected to their power grids, capable of providing services and participating in energy markets. The solution offered by decentralized blockchain-based infrastructures allows efficient and secure integration of these assets.
- Green is the new black. Corporate sustainability – from emission reduction targets to 100% renewable energy targets – is de rigueur for the world’s largest companies. This “ green ” mandate has spilled over into blockchain technology, as consensus mechanisms become more and more environmentally friendly. It is no longer about generating profits; it is about sustainable growth for the company and its environment.
Business sustainability – particularly investments in green energy and other forms of climate action – is particularly timely. Earlier this month, we celebrated the fifth anniversary of the Paris Agreement, historic international cooperation to tackle the climate crisis. As we close the books on 2020, it remains on track to innovate as the hottest year on record.
Still, I remain optimistic about the global transition to a low carbon economy … and the role of enterprise blockchain in facilitating and accelerating important parts of that transition. Bloomberg New Energy Finance’s 2020 edition New energy perspectives just released, and it confirms what we’ve been believing at Energy Web for three years: massive investments are pouring into distributed, customer-centric, low-carbon technologies. BNEF’s deep decarbonization climate scenario calls for $ 78 billion to $ 130 billion in new investments by 2050 in clean electricity, green hydrogen and associated technologies. Customer investment as part of this total is expected to grow exponentially, which is why enterprise blockchain like the one we have built at Energy Web will be so important in 2021.
As customers add hundreds of millions and possibly billions of distributed energy assets to power grids (e.g. solar panels, batteries, smart thermostats, electric vehicles, heat pumps), operators of network will need to know what they are, where they are, who owns them, the energy services they are able to provide and the electricity markets in which they participate. And the connections must be secure. The global energy sector is in the midst of a large-scale transformation from a legacy centralized infrastructure to highly decentralized digital networks.
This year’s regulatory changes – from FERC Order 2222 in the United States (opening up wholesale electricity markets to distributed assets) to the Green New Deal and the circular economy action plan of the European Commission (calling for “battery passports”) – only accelerate the transition. This is why I predict that 2021 will see the energy sector become a stunning example of blockchain adoption by businesses, as global network operators exploit its many advantages, including the self-sovereign identity of users. and assets and the decentralization of confidence in a distributed energy future.