Since 2015 blockchain has been associated almost entirely with the finance industry and more specifically, payments. In 2016, companies started to realize the potential for applications of blockchain tech outside of the financial sector, but because of our synonymous association with blockchain and money, these concepts can be hard to grasp. The reality is in fact very simple.
Only now, in 2017, is the enormous potential of blockchain—outside the finance industry—starting to be realized. Issues always exist when keeping track of information and blockchain can provide a straightforward, cost effective solution. In finance and payments, this application is very obvious: we want to know that the transaction we are taking part in is accurate and that the details cannot be tampered with. If someone is sending me ten dollars, I want to know that I am receiving ten dollars. At the same time, I want to know that all of the required regulation and reporting for the transaction has been performed so that there is no way that this transfer of money can be reneged. The same fundamental problem exists in many markets outside of finance. Whilst systems are already in place to facilitate financial transactions, transfer of data and asset ownership, much of today’s concurrent technology is not fit for purpose.
Nowhere is this truer than in the energy market, where due to the complexity of the transactions and the large number of companies and subsidiaries involved, keeping track of information accurately is very difficult. Companies in this space are often made up of many subsidiaries and hundreds of different departments, through which information needs to flow. Today, most of the information flows through traditional means such as spreadsheets, emails and phone calls. It is also true that use of the good old fax machine is not quite dead yet and it still remains a fundamental part of the transfer of information in the energy sector. These processes make it very hard to ensure that the data remains accurate, so reconciliation errors are costing companies vast amounts of money every month. By putting this data onto a blockchain, the information is always accurate, and the reconciliation process can be fully automated.
In September of 2016 BTL was invited to participate in EY’s startup challenge, in which energy trading was one of the main areas being explored. During this process BTL was able to interact directly with key decision makers at some of the world’s largest energy companies. The most significant use cases that were developed out of the challenge, and the focus of BTL’s work in the energy space today, all involve keeping a more accurate record of information as it moves through the company and its subsidiaries. It’s only a matter of time before blockchain technology will have enough of an impact on the energy sector to increase efficiencies and reduce costly reconciliation errors.