Will energy become a blockchain currency?

[Jet Cash]

I was chatting to someone yesterday, and this interesting idea popped into my head. Firstly one needs an efficient way to store energy for use on demand, and batteries are inefficient. One method that is under evaluation is the creation of hydrogen. You can use solar energy to create hydrogen from water, and store the hydrogen to recreate an energy form later - perhaps during the hours of darkness. You need to use more energy to convert the hydrogen into a stable form, and then it seems it can be kept in salt caves. The creation of the hydrogen could be a proof of work, and used to store energy credits on a blockchain. These credits could be traded, and energy consumers could acquire them, and use them to gain energy for transport or manufacture.

I  suspect that this is a bit futuristic, but energy as a currency would seem to be a useful addition to gold and Bitcoin.

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[Carlton Banks]

Bitcoin already is an abstracted form of energy based currency.

input: proof of work -------> output: BTC coinbase tx

[Jet Cash]

But the underlying assert is inert. If the underlying asset was a unit of energy that could be used in industry or domestically, then that creates a new asset class for blockchain payments.

[bitmover]

Bitcoin already is an abstracted form of energy based currency.

input: proof of work -------> output: BTC coinbase tx

Once I saw antonopoulos saying that PoW is like staking energy .
So pow could be considered a PoS of energy, something from outside the bitcoin system. I liked that idea.

I agree, bitcoin is already a energy based cryptocurrency. Bitcoin  price can even be calculated by how much energy it costs to be produced.

[Carlton Banks]

Bitcoin  price can even be calculated by how much energy it costs to be produced.

that's not what "price" means

prices are an aggregation of bids made in many different contexts, but it's misleading to believe that one can trade any good at an aggregated price. There's no such thing as "the" price in a world with such a wide variety of market conditions. Remember when BTC traded at $10,000 first in Zimbabwe (and something like $6-7000 at web exhanges). Many said "that's not the 'real' price", but had you been in Zimbabwe, it was real.

[SaltySpitoon]

If you mean an asset backed by energy, it likely wouldn't work, as energy cost is highly dependent on factors such as location. Say each token represented a Kilowatt hour (3.6 million joules) , a Kilowatt hour in Germany wouldn't be of the same value as one in China. If you tried to redeem 1 Kilowatt hour worth of energy, you may find that someone would be unwilling to sell it for less than 2 kilowatt hours worth of tokens. It would kind of end up being like buying oil on a stock exchange. You can't redeem your shares for a physical barrel of oil, and if you could, there would be shipping costs, taxes from importing into your country, etc.

[odolvlobo]

...The creation of the hydrogen could be a proof of work, and used to store energy credits on a blockchain. These credits could be traded, and energy consumers could acquire them, and use them to gain energy for transport or manufacture.

In this scenario, the credits are the currency and they are backed by hydrogen. It is not a new concept,

[Taras]

The hard part is proving that you will always be able to get x hydrogen for your x energy credits. How do you issue energy credits? Currently the only solution I can think of isn't really a solution - having a central issuer take your hydrogen and give you credits and a promise to give you hydrogen back if you should return those credits. The promise is easier to transport and weighs less than the hydrogen it is purportedly backed by, but centralizing things is a step backward - we'd have to instead first find a way for a computer to easily verify that a difficult computation took place that... resulted in electrolysis of water. I'd love to hear of a way to produce such a proof, but I can't be sure that it is possible.

[Jet Cash]

It isn't just the electolysis, but the compression of the gas to create a storable product. I guess the credits would have to be created by the storage facility. The idea is an extension of the replacement of batteries with stored hydrogen to balance solar energy demands.

Another thought of mine is to site solar energy farms on barren land by the sea. This could be converted into hydrogen, and transported to energy hungry locations. That's not a blockchain application though.

[SaltySpitoon]

Its not much different than backing a currency with petroleum is it? I'm going to preface this with saying that I'm not against hydrogen in the slightest, I make my own hydrogen for operating a hydrogen torch, but its not a very good solution for wide scale use. Electrolysis of water isn't currently very efficient compared to the chemical production of hydrogen. Its very difficult to store, and you'd have to completely re-engineer engines and related parts to run on helium.

You'd be much better off just getting credits for electricity generated by the panels, and leave it at that.

[Carlton Banks]

The above graph tells us how much energy is needed to re-write the blockchain (400+ days worth right now), using the hash rate that was available at the time. There's your energy backed currency JC.

Not directly redeemable, but in fact this is better: the energy redeems the currency, not the other way round

[Jet Cash]

My hypothesis is based on the energy unit as the actual currency, and this can be created and consumed. The energy required to maintain the currency system is not the same. For example, solar energy could be used to maintain the system, but hydrogen would be used for the actual unit of currency. These can be created and destroyed as a part of the system. The block in the Bitcoin blockchain has no utility other than that of a record of the proof of work.

[SaltySpitoon]

My hypothesis is based on the energy unit as the actual currency, and this can be created and consumed. The energy required to maintain the currency system is not the same. For example, solar energy could be used to maintain the system, but hydrogen would be used for the actual unit of currency. These can be created and destroyed as a part of the system. The block in the Bitcoin blockchain has no utility other than that of a record of the proof of work.

Energy units don't have a consistent value though. One dollar is one dollar, one Bitcoin is one Bitcoin regardless of where you go. One diatomic molecule of hydrogen will have a different value depending on where you are. If you are in Germany where electricity is $0.40/KWH or Zimbabwe where gasoline is $12/gallon your hydrogen will have greater value than in Argentina where electricity is $0.01/KWH.

[paxmao]

... The creation of the hydrogen could be a proof of work...

A proof of work has to be difficult to obtain, so producing hydrogen would be valid, but it also has to be easy (effortless) to verify by an external party, which does not seem to be the case. We are hitting our head against the usual trusted oracle issue that Blockchain has when trying to deal with physical stuff.

However I do like the concept of having a proof of work that actually does something other than burning energy. I can imagine a few cases that in which that could be applied.

I am going to wear on my devilish hat and think of a "proof of bruteforce" system.

[xtraelv]

Using wind or solar power to compress air or pump water - which can be stored and used later is more environmentally friendly and safer to store. (CAES)

https://en.wikipedia.org/wiki/Compressed-air_energy_storage

https://energystorage.org/why-energy-storage/technologies/pumped-hydropower/

[Jet Cash]

It looks as if the creation of energy could make a major shift with the rise of thorium molten salt reactors. Not only is that a clean safe way to produce electricity, but I gather that there is a significant secondary benefit. It seems it is possible to extract carbon from the atmosphere and manufacture a liquid fuel for use in conventional internal combustion engines. What a great alternative to electric cars.