By Lumai Mubanga
Blockchain can be used to provide digital services. In monetary transactions, this has been demonstrated in many ways. The same applies to a number of internet applications such as browsers, virtual private networks and APP development. However, how can blockchain technology be used to create a real-life solution to real-life world service, leveraging a blockchain to make it happen?
One of the biggest scenarios is in infrastructure development. In many countries, infrastructure development is one of the defining qualities of its GDP and status. Japan and Germany, for example, have world-renowned infrastructure. However, infrastructure is a broad term that can mean buildings, road networks, telecommunication networks and power grids.
How can blockchain technology enhance the power grid infrastructure to ease the burden of ever-increasing power deficits? In addition, how can the technology help citizens in countries were their governments cannot fund such infrastructure due to lack of capital or simply ineptitude or simply a lack of desire? In such a situation, the challenge is to identify a central party that will collaborate on behalf of citizens. In this situation, blockchain can fit in as that missing central party.
In most cases, energy is transmitted from the generating plant to houses in the community. But what if one house has excess energy and the next house has a deficit? This energy imbalance is a challenge in many communities and requires a custom infrastructure that would facilitate power from one house to another.
That’s where blockchain and ethereum smart contracts comes handy, presumably, a smart power grid. Let us say House A has excess energy, and House C lacks energy. Smart contracts can be designed to automatically distribute power evenly in the smart power grid between residential houses by carefully determining power consumption levels between households.
How can residents become their own service providers to provide local infrastructure without relying on a central government to build from House A to C? Smart contracts provide the answer. Residents involved will make promises using blockchain through smart contracts to guarantee their financial commitment to this project. House A will create a smart contract, funds in $10,000, and say that, if both House B and House C also commit $10,000, then a contractor can redeem that money in exchange for working on this smart energy grid project. This guaranteed commitment scheme powered by the blockchain technology allows anyone to leverage smart money properties to the fullest.
Coordination between untrusting parties can be done without a central entity through smart contracts. If any government anywhere can’t or won’t contribute to the quality of life for citizens, they’re now able to do it if they have the capital but not yet the system to securely combine their resources. Similar projects can be undertaken on any physical infrastructure by incorporating the digital power of blockchain.
This is one of the most revolutionary concepts in blockchain, giving users the ability to be their own service providers.