An Ethereum-based decentralized energy project is reported to be sustaining over 700 households in Germany. Lition was launched earlier this year and currently operates in over 10 cities in Germany, where it is a licensed energy supplier. Lition is built on the Ethereum blockchain and uses smart contracts to connect buyers and sellers. It claims cost savings of 20% on average to consumers.
Lition to bring choice to consumers
Customers have the option of selecting from solar, biomass or wind energy as well as their particular supplier, though they usually select the cheapest. When they have selected the energy they want to buy, they make a payment in Euros. The Etherum smart contract detects the payment and then sends the energy to the consumer. As per the website –
“Lition’s …. blockchain technology simplifies the process of buying energy directly from green producers of any scale by employing transparent smart contracts that allow consumers to circumvent all of the complexity of energy distribution brokers,”
Though the network is currently operational, Lition has cited issues with using the Ethereum blockchain, namely that it is just too slow, taking 20-30 seconds to verify transactions. Ethereum is currently a proof of work network which is energy intensive, and this is not a good foundation to create a renewable energy platform (though Ethereum is moving to a proof of stake which is less intensive). There are also high costs associated with the Ethereum blockchain. Lition is currently partnered with S&P to build a new form of hybrid blockchain and are considering their own ICO launch next year.
Decentralization in the energy sector
Lition is not the only blockchain project that is aiming to disrupt the energy sector. Power Ledger hopes to create a global peer to peer marketplace for decentralized energy where customers can generate their own energy and sell the excess to each other. There is also a number of blockchain energy grids (“micro-grids”) in places such as New York where small communities are building their own energy infrastructures. Decentralized energy projects have thus far been shown to be cheaper and more energy efficient. A proliferation of such projects could hold the answers to some long-standing environmental concerns.
The energy sector is gradually being displaced, in a similar fashion to how the financial industry is being disrupted. People are turning towards decentralized options where middlemen are no longer necessities but are, in fact, surplus to requirements.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.