Issue link: https://fhpublishing.uberflip.com/i/976659
NETWORK / 18 / MAY 2018 BLOCKCHAIN Examining blockchain John Danahy (partner), real estate, and Rob Broom, energy & natural resources, Squire Patton Boggs examine blockchain and its potential application in the electricity sector. its hash. The computers (called 'nodes') that participate in the network receive a complete copy of the blockchain, and stand as proof of every transaction ever executed on that particular system. The mutually validating network of nodes protect the coherence and integrity of the network and in doing so, avoid the need to use intermediaries to centralise all the data. Benefits of blockchain include: (i) initiating and car - rying out transactions directly, quickly and efficiently between users – i.e. peer-to-peer (P2P), with no 'middleman'; (ii) provid- ing transparency, as those with access to the blockchain can view the entire chain; and (iii) providing immediate credit set - tlement on transaction verifica- tion. (see Figure 2 for illustration of a blockchain transaction). Why is blockchain relevant to the electricity sector? Blockchain is commonly known as the foundational technology that enables cryptocurrencies, such as Bitcoin. Bitcoin and blockchains should, however, be thought of differently. Bitcoin has no inherent value and represents no asset. By contrast, blockchains and tokens can represent many things includ - ing electrical power (and its attributable monetary value). Electricity markets with legacy infrastructure are facing major changes in the way in which electricity is generated, stored known as a 'hash'. This hash is passed on to the next block, thus creating the chain of blocks (see Figure 1 below). This enables computers on the network to easily verify whether any data in a block has been tampered with since altering the data within a block would affect A blockchain is a decentralised data-ledger tech- nology. That is, there is no central database, rather databases are held by multiple computers, each with an identi - cal copy of the data. The system Figure 1: Individual blocks referencing transactions in a chain Figure 2: A blockchain transaction is maintained by a network of computers, in which succes- sive data (in blocks of records) are first validated through a network consensus approach, and then added to the ledger. Each block in the chain contains a set of transactions represented by a hexadecimal 'fingerprint'