Most people on this planet will know how the blockchain can be used for various purposes, and the financial ecosystem is just the tip of the iceberg. Just a few weeks ago, the Cambridge MIT Enterprise Forum enlisted a focus group to come up with a real life use case to distribute electricity over the blockchain. One of the more promising presentations came from none other than Bankymoon, a company looking to merge smart electricity meters with blockchain technology.
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Bankymoon Smart Electricity Meters
This initiative by non-profit organization Cambridge MIT Enterprise Forum generated a lot of interest from the blockchain community, but also from established technology companies. Consensys and IBM were two of the many companies giving a presentation on how the blockchain could be used to create so-called “smart electricity grids,” which do not rely on a central distribution system.
What was exciting is how one South African company — called Bankymoon — gave a presentation on innovating the energy sector in general, rather than only focusing on the financial side of things. The energy industry in South Africa is going through a rough patch right now, as utility suppliers and municipalities do not see eye to eye in most cases. In turn, this leads to problems when trying to recover costs from customers, which causes electricity price inflation.
Blockchain technology could play a significant role of importance in sorting out this situation. Not only would distributed ledgers create an opportunity for reducing inflated prices, but it could also assist utility suppliers in providing a more transparent service overall. Rather than using a post-paid system — which leads to mounting debts as consumers and municipalities do not pay their bills on time — a more workable solution is needed.
Bankymoon has come up with a system that just might work. If the company can convince the energy sector to adopt their idea, consumers will be able to top-up a smart prepaid meter by using digital currencies. But that is not all, as these payments would be settled automatically, by using smart contracts. Doing so would avoid any late payments and reduce debt to near zero.
Not only could this benefit consumers — as they can pay for what they need and enjoy lower prices in the future – but it also helps energy suppliers in getting paid on time and avoid disputes with customers and municipalities. Moreover, the digital currency payments would be converted on the go, protecting energy suppliers from price volatility.
Targeting Schools In Need of Affordable Electricity
Although it is not the first time Bankymoon proposed such an idea, the company is forging ahead with this concept and expects a full launch by the end of March 2016. Their first initiative will focus on South African schools in need of affordable electricity from a reliable source. Bankymoon intends to provide these schools with their smart energy meter to see how well their idea translates to real life.
But there is more to this project, as digital currency enthusiasts from all over the world will be able to crowdsource micropayments for public utilities during this initiative. Every smart meter for electricity has dedicated digital currency addresses, which anyone can use to send funds to. This approach serves two purposes: schools in need get the electricity they require through donations or self-funding, and the digital currency ecosystem gains a legitimate real-life use case in the form of smart meters for electricity.
Will this idea by Bankymoon work in the long run? Or is there a better approach you can think of that could solve the South African energy issue? Let us know in the comments below!
Images courtesy of Bankymoon, Shutterstock