Facebook’s Libra, Meet the Energy Web Chain

 By Walter Kok on September 25, 2019

 

by Walter Kok and Jesse Morris

Facebook’s announcement earlier this summer of its new cryptocurrency, Libra, has not gone unnoticed. The definitive Libra white paper released just one day before the official launch of our own Energy Web Chain in mid-June. Like many we studied the material that was released. Within a month, the U.S. Senate Banking Committee was quizzing the executives of Facebook in a public hearing on their intention to launch its Libra digital currency. More recently, Libra has come under increasing scrutiny and criticism in Europe, most notably in France and Germany.

Even so, one thing seems certain: we cannot ignore the fact that Facebook’s announcement may turn out to be the most significant on-ramp for widespread adoption of blockchain technology witnessed to date. Love Libra or hate it, some of the world’s largest companies are now assembling around what could become one of the most-used cryptocurrencies around the world. This heralds a major tipping point in mainstream adoption of blockchain technology.

With that in mind, we asked our team here at the Energy Web Foundation a simple question: “Can you build a bridge between Libra’s test network and Volta, our Energy Web test network, so the sector can see what it’s like to pay for renewable energy with Libra?” 

Hint: that’s exactly what we did.

 

Why blockchains in energy?

The global energy sector is undergoing unprecedented transformation. More capital is invested in renewables each year ($300B) than in fossil fuel power plants ($140B) or electricity distribution networks ($277B). Energy consumers of all sizes, from apartment dwellers to Fortune 100 companies, are investing tens of billions a year in devices like rooftop solar systems, batteries, and controllable heat pumps. These same customers are already spending $80B per year on electric mobility—a figure that’s expected to grow to over $2T per year by 2030

All of these new grid-edge assets owned by a variety of stakeholder groups (not just utilities) are creating an entirely different grid architecture than the one we’ve known for the past 100 years. We need a way to integrate and orchestrate all of these different assets—collectively known as distributed energy resources (DERs)—into the emerging grid architecture, and blockchains can help

To use DERs to balance the grid, we first need to trust them. We need to know they were installed properly, that they are who they say they are, that they are located where they say they are located, and we need to be able to interact with them both physically (e.g., turn on and off) and financially (e.g., settle payments with them and their owners). Enter blockchain… and perhaps Libra. 

 

The Energy Web Chain and token

Here at Energy Web Foundation, we are a global nonprofit organization focused on accelerating the energy transition via blockchain technology. Over the past two years, we have convened an ecosystem of over 100 Affiliate organizations—including utilities, energy retailers, corporates, and blockchain developers—in order to begin bringing energy blockchain solutions to market.

Already, over a dozen of these organizations are operating early-stage solutions in support of a transformed energy sector, ranging from blockchain-based tracking and trading of green energy attributes to integrating millions of small-scale devices to wholesale electricity markets in Belgium

Think of these solutions like applications in an app store. Every app—or decentralized app, in the case of blockchain—needs a platform on which to run. For the solutions noted above and a growing list of others, they are running on the Energy Web Chain, a blockchain purpose-built by EWF and its community for the energy sector.

The Energy Web Chain is unique. Like Bitcoin, Ethereum, and now Libra, it is permissionless (i.e., public) at the user layer, allowing any developer or device to build solutions on top of the network. But it is permissioned at the validator layer, meaning only approved entities are allowed to host a validator node. In Libra’s case, that means only their consortium members host validator nodes; for the EW Chain, major energy companies and energy blockchain developers make up the validator network.

This design takes the best parts of completely decentralized public networks like Bitcoin and Ethereum, while taking a different approach to chain validation. This yields a number of benefits, especially: a) enhanced governance (decisions about the network can be made more nimbly since the set of validators are known), and b) scalability (the chain can handle more traffic since there is no actual mining of transactions a la Bitcoin).

 

Energy Web Chain and Libra: cut from similar molds

In this sense, the EW Chain and Libra are quite similar: they both rely on major corporates to support a public blockchain. This is one of the most significant signals of mainstream corporate adoption of blockchain technology to date.

Thus far, most blockchain applications used by corporates rely on traditional databases or on so-called private blockchains (e.g., Hyperledger). This is not so different from how the Internet started with enterprises first experimenting with intranets. Or in the area of cloud storage, where enterprises went from on-premise data storage to private cloud to hybrid cloud and now public cloud. We see the same happening in blockchain. Now, with the EW Chain launched and Libra’s full unveiling coming next year, we have major evidence that the corporate world is waking up to the value that public blockchains can unlock. 

 

Bridging Libra and the Energy Web Chain

Libra’s strikingly similar architecture got us here at Energy Web extremely excited: here is another community of major corporates with plans to actively support a truly public blockchain network. But we also saw an opportunity to help demystify what it feels like to use dApps running on a blockchain like EWC. 

We asked ourselves, what if you could use an energy blockchain dApp to buy renewable energy, get paid for letting your neighbor use your EV charger, or get paid by your local utility to adjust your hot water heater by one or two degrees every day—all seamlessly, via a mobile application, using Libra tokens as the medium of exchange? In other words, what would it look like to use a cryptocurrency born of one of the world’s most popular social media platforms to transact with the sort of modern, low-carbon energy technologies (like solar panels and electric vehicles) that are becoming increasingly common in our everyday lives? 

Step 1 in fulfilling this experiment was to make it possible for the two blockchains to interact via a blockchain bridge, making it possible to “lock” Energy Web Tokens on the Energy Web Chain in order to buy and pay an equivalent amount of Libra tokens via the Libra blockchain. We recently constructed and tested this bridge (inspired by our work on the Energy Wallet and other experiments in the rapidly developing burner wallet space) and posted a demo of the transaction here. Consider step 1 mission accomplished.

 

 

Join us: the brave, new blockchain-based energy future

We invite all energy blockchain developers to join our mainchain with real tokens, bridges to mainnent ethereum and DAI, or come to Volta to play with Libra. The bridge on the Energy Web Volta testnet is now live and we encourage others from the blockchain ecosystem to contribute to our experiment in order to help make the user experience for energy blockchain dApps more tangible as both Libra develops and energy blockchain dApps move closer to commercial production. 

Walter Kok is CEO and Jesse Morris is CCO of Energy Web Foundation.

The Energy Web is an open-source, scalable blockchain platform specifically designed for the energy sector’s regulatory, operational, and market needs.

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