From Analog to Blockchain

Last week, a story appeared in the Belgian national newspapers regarding new ‘smart meters’ which are going to be forced to consumers in 2019 by the Belgian government. A lot of issues are being raised regarding data privacy. In contrast to the Netherlands, there will be no system to shut down the meter’s communication function to outside services (standaard.be — 16 April 2018).

In this post, I will explain how blockchain technology can solve these issues regarding data privacy, while at the same time ensure transparency to all stakeholders involved, and offer new opportunities.

Why should I care?

If you don’t care about the privacy issues regarding smart meters, think again. Here is an example scenario: You and your partner both have a 9-to-5 job, so during every standard weekday, almost no energy and water are being used. This daily pattern gets recorded by smart meters in detail. The data gets stored by different service providers who have direct access, like your energy company for example. Next, a data breach happens, or a rogue employee sells your information on the dark-web. Now your data is out there, and so is your privacy. Criminals now know exactly when you aren’t home. Even worse, they know when the whole street isn’t home…

So now you do care about privacy, but at the same time still want to enjoy the benefits of smart-meters. For example, having access to this digital data can help you mapping your energy consumption, and thereby help you in reducing your energy consumption. At the same time, you would like to automatically send aggregated data (like monthly usage) to your energy company, so they don’t need to pass by the house anymore.

So, how to ensure you have control over your own data?

Yes, with blockchain!

Ok, so blockchain… but how would this work? Consider the picture below.

Smartmeters storing data on a blockchain network

Instead of your smart-meter sending (your) data to a centralised party (e.g. your energy company), the meter stores it locally, in the device itself, or another device that you own — and trust. The special thing about this storage is that it is actually a blockchain node. Yes, even your smart-meter itself can be part of a blockchain network. Another option, is that your own house can be used as the trust anchor, hosting its own blockchain node, or sending the data directly to a trusted hosted blockchain node in the cloud.

And what would be the difference with normal storage? Blockchain networks are very good at keeping track of who owns which asset across a decentralised network of nodes — meaning no centralised party is necessary anymore to store this single source of truth. ‘Data’ can also be seen as an asset. And because it’s your data that you store on a blockchain, you have the ability to define the rules about who gets access to which part of your data. While at the same time, you are still registered as the owner of the data itself. These changes in rules are also stored on the blockchain, which in turn results in everyone interacting with this blockchain, to automatically comply with these new rules.

Changing these rules can be done by a simple web-interface, once authenticated. This way, you maintain complete control over your own data. You can choose to share different parts of it with people and companies you want, in very transparent and secure way. See the screenshot below as an example.

Example of changing access control rules on your profile with a simple interface. This proof-of-concept was build with Hyperledger Fabric underneath.

Benefits

Clearly, this all brings some nice benefits to the table for different stakeholders.

Data privacy

You don’t want to share your smart-meter data with anyone? That’s fine. You can ‘opt-out’ by simply ‘flipping a switch’ (like in the screenshot), that will change the rules on the blockchain, which in turn limits access to all other parties automatically.

Data ownership

It’s your data, so you are the owner. Blockchain technology enables everyone to keep track of who owns which asset (‘data’ in this case) without the need for a central party to keep track. Only the owner(s) of the data can decide who becomes the new owner(s) by transferring their ownership.

Data portability

Today, companies can be seen as silo’s or ‘verticals’ when it comes to data storage. Consider the scenario where you want to change from energy company. You’ll need to onboard again with the new company and sign off with the old one. On top of that, you’ll likely lose all your data stored at your old energy company unless they are willing to provide this to you.

Your data is stored in data silo’s

In the blockchain scenario, if energy company A and energy company B are both part of this blockchain network, it’s much easier to bring your data from one company to another, since it can already be accessed via the blockchain. As a user, you’ll only need to alter your access control rules, to allow the new company to access your data in the way you defined it. (And while we are at it, even the process of changing from energy company itself can be done automatically, by digitally signing a smart contract on the blockchain itself… but that’s beyond the scope of this post.)

Or consider the scenario, where you have moved to a new house. Because your data is securely stored on the blockchain, you won’t lose it if you get a different smart-meter in your new home.

Data sharing

Not only can you share your smart-meter data with your energy company through the blockchain layer, you can now also choose to share it with other households, or any other participant who can authenticate himself on the blockchain. This opens up a lot of new possibilities.

  • New service providers can more easily enter this market, since the playing field of accessing data is now made even for everyone (so not only your energy company).
  • Local governments can participate to get a better view on how their districts are doing in terms of energy and/or water use. Thereby offering new grants for example to their local citizens for improving their houses.
  • Locals can compare their energy use directly with their neighbours, to see how they are doing in comparison. All without the need for a central party to host their data.

The Internet of Assets

Have you noticed that I haven’t mentioned cryptocurrencies in this post (up until now)? Cryptocurrencies are just other assets, just like your data, which both can have value. It’s important to know that using crypto isn’t always necessary when using a blockchain layer. Just like in this example of smart-meter data, no crypto would be necessary when using permissioned blockchain technology, like BigchainDB or Hyperledger Fabric. (side note: public blockchains always involve cryptocurrencies)

However, you could still choose to include cryptocurrencies in the case of permissioned blockchains. Why? Because it enables even more possibilities. It helps in incentivising stakeholders to open up their data and interact with each other. Now you are entering the playing field of Game Theory.

Game theory categories

For example, instead of sharing your data without reimbursement. You can now ‘sell’ your own data in return for crypto. That way, you get incentivised to share. But if you can sell your data (which is an asset), why not sell your energy (which is also an asset) directly to your neighbour?

The Future Future

A lot of new possibilities start appearing thanks to blockchain technology. Hopefully, you’ll start to see now why blockchain technology gets so much interest from various sectors, businesses and communities.

Cheers!


From Analog to Blockchain was originally published in wearetheledger on Medium, where people are continuing the conversation by highlighting and responding to this story.