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Build Your Energy Blockchain Application on a Public Blockchain

In a previous post, I talked about the differences between distributed ledgers and blockchains. Another somewhat controversial topic in this space is the debate around public versus private blockchains.  Grid+, a startup attempting to make it possible for consumers to participate directly in energy markets, has a recent blog post called "No Country for Private Blockchains", in which they articulate a good argument for the public blockchain.  They are deploying their solution on Ethereum and feel that the public blockchain approach helps to spread the cost of the shared infrastructure, makes it more secure, and increases value by ensuring that state changes are on the public chain.  Another energy blockchain application startup, PowerLedger, in Australia seems to be taking a hybrid approach using a public+consortium blockchain - for now at least.  Given the high degree of privacy and security that is required to participate in the energy industry today, it's an important decision for any blockchain project that is going to try to disrupt the market.

There are a lot of blockchains out there and many variations of distributed ledgers that are blockchain-like.  Most people know some of the basic characteristics of Ethereum and what makes it special.  At a very basic level, it is a public blockchain that supports smart contracts.  This capability is a crucial differentiation from other blockchains like the Bitcoin blockchain.  An interesting working paper was recently published by Martin Valenta and Philipp Sandner from the Frankfurt School Blockchain Center on this topic as well.  Check out the paper as it does a great job summarizing the publicly available information about Corda, Hyperledger, and Ethereum.  The table below, from the paper, identifies some of the core differences between these blockchains or DLTs:
 Comparison table from "Comparison of Ethereum, Hyperledger Fabric and Corda" by Valenta and Sander

There are many other differences across these various platforms.  It is critical to understand at a detailed level what the core requirements are for an application and an industry in order to determine the type of blockchain that an application should run on.  For energy blockchain applications, I think it remains to be seen what the key requirements really are, especially since the energy industry is going through such a major shift right now.  What might have been true 5-10 years ago no longer holds, and shouldn't be used as the basis of design decisions going forward.


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