In an exclusive interview, Jo-Jo Hubbard, co-founder and chief operating officer of UK blockchain platform company Electron, explains why the technology is often misunderstood.
“The reason a lot of people don’t understand blockchain comes from the fact that it is usually explained as a particular blockchain.”
She says: “People are making claims like, ‘blockchain is transparent; blockchain is opaque; blockchain is secure; blockchain is not secure; blockchain is fast; blockchain is slow’ – and they all might be true for ‘a blockchain’, but they aren’t really true of blockchain in the abstract.
“Blockchain in the abstract is a technology. Essentially, it’s a protocol, a set of rules, which is enforced across participants in a network. And when all those participants adhere to those rules, they are able to essentially update the status of the network and maintain that network together.
“So in the energy space, blockchain is very exciting in terms of being this co-ordination mechanism.”
She says in an increasingly decentralized energy world, “we need a new co-ordination mechanism that is capable of enforcing a set of rules across all those different assets. And that gives them the ability to access a market in a rules-based, auditable fashion. And that’s why I think the energy industry is getting very excited about this technology.”
She stresses that blockchain in itself is not a business model: “It’s a technology that enables much more granular business models and much more asset participation in the energy industry.
“What’s almost been misleading about recent waves of press coverage, is blockchain does not necessarily enable new business models. Business models like peer-to-peer or vehicle-to-grid are possible with a central intermediary: blockchain allows them to do it without the central intermediary – which can improve the cost efficiency function and also the trust function.”
She highlights decentralized energy as one aspect of the energy industry that is “particularly ripe for co-ordination. Co-ordination across potentially competing, potentially non-competitive parties. And that’s Electron’s core focus – the flexibility markets.
“There’s a really exciting component of the flexibility trade that doesn’t really exist on any of exchange product today.
“Our application is an enterprise application that is solving a problem that a lot of asset owners or flexibility providers or aggregators want solved and participants on the other side who are buying this flexibility haven’t been allowed to solve themselves.”
“Co-ordination is key to realizing the full value of digitalization. There are three core platforms that need to be co-ordinated and shared. It’s the asset register: what is it; where is it; there’s the trading platform and the rules around how you are allowed to interact; and then there’s the data repository.
“Everything else – all the other competitive business models – can be built on top of that structure, but that infrastructure needs to exist first.”
Hubbard says the key to developing the blockchain platform is “about building something that’s future-proof. We know we need to build an infrastructure that enables greater asset participation in the system. Because that creates more competition, it increases the efficiency of the system, and it also increases the resiliency of the system.”
Jo-Jo Hubbard is a keynote speaker at Electrify Europe in Vienna in June. For more details click here.
This article is an extract from a longer exclusive interview that will appear in PEi magazine later this month. Subscribe here to be sure of receiving your issue.
VIDEO: Jo-Jo Hubbard defines the digitalization of energy