Published on 25 November 2018 |
by Michael Barnard
November 25, 2018 of Michael Barnard
Along with our normal daily coverage for clean technology news, CleanTechnica it also produces in-depth reports on various aspects of clean energy and clean transport. One of the emerging technologies we cover is not directly a clean technological innovation is blockchain, which promises to be a catalyst for innovation in the green economy in the near future. Blockchain is probably best known to the public as "having something to do with cryptocurrency and Bitcoin, right?", Which is partially correct, but the technology itself has a wide range of applications, some of which will be crucial in the fields of distributed renewable energy , network management and energy storage, and smart contracts, among others.
The full report Blockchain: an enabling innovator for clean technology, which was published in July, is a deep immersion in the blockchain and its potential, and we will publish further extracts from the report in the coming weeks. (Read the last episode here.)
The blockchain and related technologies assessed in the first part of this article are:
3. Ethereum Casper
Each technology has its own radar chart showing its strengths and weaknesses on a simple scale of 1-5, with 5 generally good and 1 generally weak. Furthermore, a general discussion on each of them will be included. The criteria are:
Some of these approaches recognize and work effectively with their internal coins or tokens. Others intentionally outsource all payments to circumvent the inherent limitations of the Smart Contracts Guarantee Agreements discussed above. One allows both. Depending on the application, this is useful or not, but more flexibility inherent in the platform will mean less to build on it. And of course, people outside the cryptocurrency world still want to make transactions in legal currencies.
Two of the main challenges of blockchain approaches were the low speed and high transaction costs. To meet the promise of the distributed and immutable register, these must be overcome.
Effective smart contracts:
Smart contracts and distributed applications are actually the same thing. They have been implemented in both specially designed and existing languages. Conceptually, they have a learning curve and the toolkits are weak at this time. Some are better than others, however. Another factor to consider is the cost of publishing and executing smart contracts and distributed applications.
A large part of the world of cryptocurrency wants to avoid regulation, but for blockchain solutions to be useful in today's real world, they must be able to play well with existing regulations. Some of these are trivial, since the ability to control an immutable and distributed ledger is a part of the solution. Other elements, such as identifiable transients, are more difficult and often often intentionally obfuscated. And the obfuscation of sensitive data to align with regulatory requirements can challenge many implementations.
This is a rapidly evolving space. Some of these technologies are still effectively in alpha and none are more than 10 years old. Most are less than 5 years old in current versions. There are a couple with intriguing promises that I have included, but I would not bet the farm on any of them now if I was trying to solve a problem today.
Some of these technologies have been implemented to solve very specific problems. RIPL, for example, is intentionally a foreign currency settlement system with no intention of being anything else, although I'm sure someone is using the approach elsewhere. Some are widely useful.
It is important to remember that blockchain is just a component of a solution designed for most problems. It does not exist in the void. While most implementations make the data itself immutable, it's not the same thing for sure. And some solutions have suffered enough hack over the past three years that it is difficult to consider them intrinsically safe.
Used in Cleantech:
Not all these technologies have direct applications today, but all the main ones are included for completeness. Some are cleantech workhorses, especially Ethereum today. Others have a significant promise and I will try to identify it.
Bitcoin is the grandfather of this space and is showing his age. It is the slowest, most expensive and less flexible blockchain implementation.
Bitcoin has set a fairly standard approach for most of these technologies because it has published for the first time a white paper that describes the approach and the intent, so he set up an opensource project to create the solution.
Bitcoin was created specifically as a reserve of value and to a lesser extent as a currency for transactions. No attempt was made to optimize it for performance, but rather to optimize it for anonymity and lack of transparency for regulators and authorities. Use the proof-of-work approach to ensure integrity.
Although it is possible to execute smart contracts on the blockchain at the base of Bitcoin and at least one organization did it, the only value proposition for this is if you need to make transactions in Bitcoin itself. Even then, new solutions such as Ethereum and currency bridges enable simpler and more efficient solutions.
Bitcoin is completely generalized, in that it is specifically intended as a fungible currency. It does not have a reference market, although it has natural users in Libertarians, survivalists and criminals.
In cleantech, the only use identified for Bitcoin is the payment of electricity, something that Bas Nederland started to grant in 2014.
Project | White paper
Ethereum is much more dominant in the blockchain than many think. Most cryptocurrencies and non-Bitcoin applications are currently running in the Ethereum approach, directly or indirectly.
It has reached a substantial maturity, but in the world of the blockchain it is also starting to be a bit long in the tooth. It's faster and less expensive to deal with than Bitcoin, but it's still slow and expensive for many purposes.
The main innovation of Ethereum was the introduction of smart contracts. Its use of the complete Turing Soliding as a language that is effectively compiled in the blockchain itself allows to build distributed applications. And because of its dominance as a platform, there are many more programmers and Solidity resources out there than a handful of years ago.
While Solidity allows you to create complex distributed applications, running them is moderately expensive compared to other platforms.
From the point of view of settlements, while there are many equivalent foreign exchange offices, Solidity's contracts and intelligent applications really only include Ethereum (or tokens created with the Ethereum protocol within that implementation). The settlement is quite limited to the cryptocurrency without a lot of bolts.
Currently, Ethereum uses the labor-intensive, computationally expensive testing mechanism, and probably now obsolete to ensure integrity.
Like Bitcoin, Ethereum is not architected for regulatory compliance, but is not as stubborn as Bitcoin. As a platform, it may inhibit some applications in regulated domains without extra attention and extra work.
From a cleantech perspective, Ethereum is the dominant platform for network-related tokens and other use cases.
Project | White paper
3. Ethereum Casper
Ethereum is going to endure a hard fork, which is not a tool to eat hard food, but a non-reversible alteration to its code and its approaches. It's called Casper – yes, after the phantom buddy – and moves from the Ethereum test protocol to the most effective game-proofing approach.
This should increase its speed substantially, while at the same time reducing the underlying transaction costs. It remains to be seen if this alters the average transaction price from $ 0.50 to $ 1.50.
This should make the Ethereum platform and technology a probably more dominant player than it already is. However, competition is rising and the settlement is still relatively rigid.
Project | White paper
Hyperledger is a beast other than Ethereum or Bitcoin. It is a B2B collaboration technology without cryptocurrency. It aims to automate aspects of the legal contracts negotiated with the man, not to be a contract vehicle alone.
All payment mechanisms are outsourced and there is no way to automatically activate payment within and from Hyperledger. It is a non-currency platform that only a cryptocurrency seems to have been built on it, VIVA.
Use cases include sharing of common metadata between organizations, metadata and security, with a focus on financial services, government, supply chain and health.
Its efficiency derives from the centralization of block creation in a single cloud computing resource rather than competing for the resource. Blocks are validated by other participating organizations. This means that computationally intensive portions are executed only once and can be resized appropriately for performance.
From a cleantech perspective, most of the examples seem to be implemented by IBM, so they will be covered in the next section.
Not surprisingly, given the corporate heavyweights involved in creating Hyperledger, the white paper is available in volumes.
Project | White paper
Part 2 of this article will include the assessments of IBM Blockchain (Hyperledger), IOTA, NEO, RIPL, EOS and Stellar.
Stay tuned for more excerpts from Blockchain: an enabling innovator for clean technologyor view the summary and request a complete report at https://products.cleantechnica.com/reports/