A Future of Distributed Ledgers
Roger Woodworth , principal consultant at Mindset Matters, helps others align strategies for greater impact. Previously he was vice president and chief strategy officer of Avista Corp. He's chaired Edison Electric Institute's customer service executive advisory committee and was board president of the National Hydropower Association and the Northwest Gas Association.
A Future of Distributed Ledgers
Pay attention. You can hear a train rumble in the distance. Do you stand still on the tracks? Or do you run and hide in fear? "No" is, of course, the answer to both questions.
You know enough to take precautionary steps in anticipation of what's to come. So, you move before the roar of the train is upon you. Far enough to avoid the danger and to the right side of the tracks so your progress is not impeded.
But what do you do if the signals are unfamiliar?
The military faces this sort of situation all too often. They refer to it as VUCA - Volatile, Uncertain, Complex and Ambiguous. The basic response to VUCA situations is to listen, act in proportion to the signal strength, and listen again. The precautionary measures yield ever-greater insights. Each turn of the cycle shrinks uncertainty and expands preparedness.
Pilot projects at utilities often seem to serve a similar purpose. Experimental rate designs, behind-the-meter service trials, and studies of all kinds of grid technology are some common examples. That's smart. Pilots offer an efficient way to detect risks, confirm opportunities and improve processes. Each turn of the cycle boosts the odds of success.
Now is the time to apply this tried-and-true approach to a new, enabling technology: blockchain.
The Early Rumble
An early signal, to those paying attention, was bitcoin, the first popularized cyber-currency. Proposed in 2008, it quickly became a widely-used, peer-to-peer electronic currency for Web transactions. Bitcoin overcame several early challenges, one of which was reliable verification of transactions. Enter blockchain.
Blockchain is a distributed system of electronic ledgers that provide automatic, instant cross-verification of transactions. With it, bitcoin offered an unsurpassed degree of reliability. No need for intermediary banks. Talk about disruption!
Proof that it works? In just eight years, the value of all bitcoins in circulation worldwide has surpassed fourteen billion dollars. Now a mainstream currency, you can use bitcoin to purchase goods online at Microsoft, Apple, Amazon, and even Home Depot and CVS drugstores. Entire countries are adopting the digital currency for various reasons, most recently India and Venezuela.
Take note: Several new cryptocurrencies, in addition to bitcoin, are now growing in circulation. Hundreds of new companies have emerged to serve the sector, managing exchanges, payments, storage, services, and analytics. Venture capitalists have backed them with hundreds of millions of investors' dollars.
You might ask what cyber-currencies have to do with utilities? Perhaps you think utilities can just wait and adopt bitcoin or cyber-whatever later, after everything is certain and the train is in sight. But anticipation and precautionary actions are the best course in the face of uncertainty.
From Rumble to Roar
These signals about cyber-currency are the distant rumble.