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Blockchain in the Energy Industry

7.2  BLOCKCHAIN TECHNOLOGY IN ENERGY INDUSTRY:

INTERNATIONAL USAGE AND PRACTICES

Due to the speculative bubbles in the cryptocurrency markets, modern citizens

consider blockchain synonymous with applications in the finance, banking and

fintech industries. In other words, the payment and mode of exchange appli­

cations of blockchain grab the largest number of headlines (Upadhyay, 2019).

Nonetheless, with cryptocurrencies exhibiting enough independence in their pric­

ing and market dynamics behaviour, the controversy over whether they are an

independent asset class is nearing an end (Sifat, 2021). As such, the novelty aspect

of cryptocurrencies is effectively fading. This makes possible greater propaga­

tion of news to the public about the myriad applications and extensions of block­

chain-based initiatives. The nature of blockchain technology has changed the

fintech industries because of its high performance and the fast and stable nature

of transactions. Besides, blockchain is claimed to have the ability to enable finan­

cial trades, breaking down national currency frontiers (Chakravarty et al., 2020).

Additionally, blockchain is said to reduce the burden of audits on every financial

ledger (Queiroz et al., 2019).

Nevertheless, blockchain has its implications beyond digital currencies. In fact,

there are various uses of this technology, ranging from land and property registration

to property possession and trade protection (George et al., 2019). It can also be used,

as we know, for international cash payment, fund transfer and recording intellectual

property rights and copyrights for different industries (Chang et al., 2019). As for

payment systems, blockchain technology is the smartest application, with greater

accessibility, a more agile platform, less proneness to errors, and smoother transfers

than those of the other existing payment and settlement processes. In addition to

the fintech industry, blockchain has a potent future in the energy industry. For the

energy market, however, blockchain can be a very expensive data storage tool (Hou

et al., 2019). It is indeed unfortunate that barring the financial industry, blockchain

technology has received sparse attention – particularly in the energy sector (Hald &

Kinra, 2019).

Lack of understanding of this new technology has posed challenges for regu­

latory bodies, and many lawmakers and enforcers do not show adequate compre­

hension of its scope and implications (Rennock et al., 2018). Therefore, the energy

market (for good reasons a heavily regulated market) will not be a suitable choice for

the proliferation of decentralized blockchain technologies. Given this, it is still true

that in addition to enabling money exchange, blockchain technology will be able to

accommodate complex tasks such as tracking activity, property recordkeeping and

exchanges, transfers of environmental and social goods, etc. As of the first quarter

of 2021, another innovation of blockchain-enabled technology is gaining momen­

tum – nonfungible tokens. These tokens are exhibiting the limitless power of block­

chain technology in not only storing memory but also keeping accurate records and

historical snapshots. There have already been some implementations of blockchain

in the energy industry. This part of our discussion focuses on the possibilities that

blockchain can bring to the energy industry.