A Vision for SolarCoin

in #solarcoin3 years ago (edited)

A wild 6 months, eh? With the price of SolarCoin now at roughly one sixth of its all-time high, we're back where we were half a year ago.

Now that the dust has settled it's clear that - like many crytos - Solarcoin's price is based almost entirely on hopes that a market will appear, rather than specific use cases

So here I address what is perhaps Solarcoin's fundamental question: how to get SolarCoin used? Because without solid usage, rebounds to today's price will leave SLR of not much practical use.

New SolarCoin patches - available here (for SLR)

The Token Economies of the Energy Market

Surely Solarcoin's principal target is the business of energy. There are millions of solar installations around the globe (900,000 in the UK alone), and billions of electricity consumers. With meter readings taken every 30 minutes, the potential to represent all these transactions via a digital currency is almost beyond comprehension.

There's a key concept here - token economy. Think of it like a token's GDP. Until recently, the token economies of most digital currencies have remained largely theoretical. However, in the energy sector some cryptos are starting to prove significant usage cases of their token's economies.

It's noteable that SolarCoin is not one of them.

Other Energy Cryptos are Developing in the Energy Market

In my role as Chairman of Brighton Energy Coop we've had discussions with  various energy blockchain operators - Power Ledger, Electron, and Python - about what has long been the holy grail of solar production - selling our electricity direct to market (wholesale or peer to peer).

I have found that in the UK at least there are many trials running (some already in the regulator's sandbox) which involve blockchain operators with both grid companies and supply companies. With all these middlemen all involved, sales of tokenised electricity seems less theoretical by the day.

There are others also active in non-UK markets (or not to my knowledge at least): notably WePower in Estonia and Spain and Restart Energy in Romania who are making big strides forward.

Many of these blockchain operators have an advantage over SLR in that they have recently done ICOs. That means they have a significant budget to go out and get trials up and running with both generators, distributors, and consumers.

SolarCoin does not currently appear to have this capacity.

And yet this is what is required to get usage going: a route to market is not going to magically appear - it need to be built

The difficult bit - getting tokenised energy to the consumer

It's shouldn't be that difficult to tokenise solar energy, whether that's through mining (like SolarCoin) or just uploading production data to Ethereum and creating a token via a smart contract, rather like a PPA (like WePower).

What is difficult is getting that tokenised production through the grid operator, via the electricity supplier, to the point where it can be bought - in a token form - by a consumer.

And yet that is fundamental because it's the consumer who will consitute the demand of the token's economy - buying it to pay for his or her electricity. 

The key thing is therefore to get access all the way between producers (the solar systems) to consumers (the people paying the electricity bills).

A Vision for SolarCoin

This can't happen without grid intermediaries. So the route to market lies with these kind of partnerships: grid companies, and electiricity supply companies, and then regulators.

This will require advocacy, networking, and a well-resourced development team that can put these partnerships together - just like the energy cryptos who have recently gained funds through ICOs.

This is not meant as a criticism of those involved in developing SolarCoin. I appreciate that extermely heavy lifting has been done to get us to where we are now. It is meant as a route map based on how I - working in the solar industry - see energy cryptos evolving around me. 

My suggestion is to take WePower's route - connecting solar farms to the wholesale market. This will provide transaction volume, and significantly less manpower per kwh to both implement and oversee. Peer to peer is fine (basically what Power Ledger, Electron and Python are doing) but has much smaller of transactions, and hence a smaller token economy.

Perhaps Solarcoin's ambition really is to be the airmiles for solar. And - since I'm no blockchain expert - I don't know if the SolarCoin blockchain is up to the billions of transactions required to represent the electricity ecosphere. What I do know is thaat airmiles do not have a large token economy.

But without a portfolio of demonstrable and expanding use cases SolarCoin will be sidelined by other emerging 'utility coins' in what is potentially its biggest market.


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The value of your insight/experience is evident in this post Will. I’m still trying not to determine if I should accept the affiliate status I’ve been offered, but it’s a fairly big commitment. I’d be more inclined to do so if there was a clear networking, advocacy and development plan in place along with people committed to it. I like that my participation in the project is so open. I likely wouldn’t have gotten involved if it was more formal. But the lack of formality is also a challenge as you’re indicating here. I wonder if at some point SolarCoin needs to do some overt fundraising to hire some full time staff to drive the project.

On overt fundraising: yes, absolutely. I've been talking to teams that have tens of millions in their back pocket, they have the ability to get lots people around the globe - if they can't open doors in one country then they just try the next. It's gonna take lots of hard work and dedicated people.

BTW - what does an affiliate do?

An affiliate runs the API on their own website to onboard new members, collecting a reward on the first year of rewards. You have to have a business liscense and know the anti laundering laws in your region, etc. And then he willing to create and maintain a marketing plan to attract producers. There are a handful operating now and should all be linked on then solarcoin website.

Got it. So all onboarding, then. It could be worthwhile, but medium term problem of usage still remains.

I would imagine that anyone going to the trouble of being an affiliate would ne motivated to work in committee to do some of the work you describe. But I just don’t know how much time and energy anyone really can give. I have a very flexible schedule and I’m not sure how much more I can contribute, and I know most people work longer days than I do at their day job.

Coins mentioned in post:

CoinPrice (USD)📉 24h📉 7d
ETHEthereum868.057$-1.93%-1.33%
GASGas39.745$-9.03%-7.39%
POWRPower Ledger0.573$-6.31%-17.16%
SLRSolarCoin0.519$10.62%5.8%
WPRWePower0.171$1.24%4.29%

Perhaps Solar coin currency/tokens can be purchased by socially conscious companies to offset their energy usage. In US, there was this cap and trade policies for manufacturing companies being talked about in the previous federal administration. I have also seen in some airline online web sites an option to buy green credits to offset the air travel. I thought SolarCoin can fill in those needs.

It's an interesting idea. There could be some mileage buying SLR as some kind of offset mechanism. I'm always suspicious of offsets (emitting CO2 then taking it out seems a roundabout way of not putting it there in the first place) but there could be a significant group of SLR 'buyers' if people were to offset with it.

Are you part of the Solarcoin Foundation?

No I'm independent. As a UK solar developer, though, I'm keen to see how we can incentivise more solar here.

SolarCoin isn't intended for energy trading, it's a pure incentive. This is quite smart as it skirts all the different regulation heavy national energy policies, and allows it to expand unimpeded. The use case for SolarCoin is a global currency that is 10 times faster than Bitcoin, uses hardly any energy to operate and is initially distributed to producers of solar energy (itself a highly distributed energy source).

A real problem for energy trading coins is a lack of block-chain compatible and secure metering equipment, manually loading meter readings is not scalable and the potential for fraud is huge. This issue will need to be solved for every energy supplier in each nation before those projects can gain traction, effectively needing a second or third global smart meter rollout.

My view is that the SolarCoin model is far more realistic in the short/medium term as it's barriers to entry are far lower.

Fair enough. But a currency is only valuable if it has supply (i.e. the incentive) AND demand. OK, it's faster than BTC but so is Bitcoin Cash. Agree that the initial distribution is an advantage (i.e. lots of people have it).

And true about meters - we have a hell of a job just tying readings from the the 50 inverters/ 20 arrays/ 8000 odd panels that we own. It's bloody stone age!

Yeah I see your point. My hope is because SLR can make a footprint in a specific community first, that the economy will come into being. We dont worry about who wants to buy Pounds, Euros, Dollars, becasue inside our bubble we all transact value with the same tokens. If we can create that similar industry bubble for Solarcoin, it might just work.

P.S. Its also important to note Bitcoin and therefore by extension SolarCoin, is cheaper, faster and more secure to use as a currency than Pounds, Euro, Dollars etc., this is why if a solar economy begins to emerge, participants would rather use SLR than their native fiat; SLR grants alone would not be enough to feed all participants in such an economy (unless users install more solar capacity) and will probably lead to currency demand.

A real problem for energy trading coins is a lack of block-chain compatible and secure metering equipment, manually loading meter readings is not scalable and the potential for fraud is huge.

Agree. Some serious weight lifting is required to develop a solution for this. Any leads @scalextrix? e.g. people making good progress on this front

I think PowerLedger listed Landis+Gyr as a partner so perhaps they have a concept (please confirm DYOR).

In the ElectriCChain community we have some people with ideas about how secure block-chain compatible metering can be achieved. I think its not so much that part thats the issue, its about how you get meter manufacturers to understand block-chain, and how you get utility companies to retrofit meter devices, when in many developed nations they are still rolling out phase 1 smart meters.

In the ElectriCChain community, we have some people with ideas about how secure blockchain compatible metering can be achieved.

Thanks @scalextrix. I have had an 8-year career in renewable energy here in Malaysia; and would love to be part of this conversation. Is it an open community? Can u introduce me in please?

Yes its all open, if you look on https://solarcoin.org/en/solarcoin-forum to join the SolarCoin slack, TBH most liveley conversation happens there. You can also find the link to join the ElectriCChain specific slack http://www.electricchain.org/electricchain/community/

Hey - nice patches! ;)

Really interesting post!

For what it's worth, I'm not sure if the point of SolarCoin is to be a network trading token like POWR or SNC... although it might be one day if it becomes very popular.

I share your frustration on what seems to be a chicken-and-egg hesitancy on the part of potential adopters. How SLR adoption is significantly ramped-up and gains critical mass for goods and services (as well as being a rewards program) I don't know - just selling a few badges to supporters isn't going to move the needle much!

As a Solar Energy insider, particularly in the community energy space, I see BEC could have a significant advocacy role for SLR, but Community Solar is tiny compared to utility grid scale... for now at least.

How we get those guys (c/f ACWA) on board is key IMHO. If I was Emperor of the World it would be the global reserve currency by now.

But then I read that there will be 50,000 low income homes in Australia supplied with free Tesla solar PV and battery storage and think.... opportunity!

And now I'm going to read your post a few more times to make sure I understand the important issues it raises.

Onwards!

Thanks. Yeah - it's complicated stuff. I try to distill it down as much as possible but it still comes out complicated!

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