What is blockchain?

The purpose of this study is to analyze the potential impact of blockchain technology on the electricity sector and explore what opportunities it can offer to buyers and consumers of electricity. Blockchain was created as a niche product in secondary markets, however, this technology has recently attracted the attention of experts from various industries, as well as aroused increased interest from the media.

Blockchain is a special technology on which platforms are based for conducting transactions between peers, acting without intermediaries, and in which decentralized information storage is used to reflect all transaction data. For example, one of these platforms https://nxtinside.org/.

For the first time, blockchain technology was used in the financial sector, where it served as the basis for the creation of the bitcoin cryptocurrency. Recently, more and more applications have appeared that extend the key function of this technology - decentralized storage of transaction data - by integrating mechanisms that allow real transactions to be conducted in a decentralized manner. These mechanisms, called "smart contracts", operate on the basis of rules established on an individual basis (for example, specific requirements for quantity, quality, price) and allowing automatic selection of potential customers for suppliers and vice versa based on distributed ledgers.

Blockchain is a technology that allows transactions between peers in a single network (P2P network). Transactions of this type assume that each member of the network can carry out a transaction directly with any other member of the network without involving a third-party intermediary.

The innovation of blockchain technology is that information about transactions is no longer stored in a centralized database, but is transferred to computers of all network participants, which store data locally. The first application based on blockchain technology was the Bitcoin application for the so-called cryptocurrency (bitcoin). In recent years, Bitcoin has served as the basis for the creation of other blockchain applications, most of which are currently being developed in the financial sector. More recently, a number of companies have been created and separate projects have been launched, the purpose of which is to apply the principles of blockchain in other industries, including in the electric power industry. In general, blockchain applications are considered to be a very promising technology, but they are still in the early stages of development.