​Blockchain—the latest disruptive technology facing electric cooperatives—does not generate, store or control the flow of electric power. It is not a piece of hardware like a solar panel or a lithium-ion battery.

Blockchain exists as a software-based technology that offers a financial platform for individuals to buy and sell goods and services. Some energy market participants see blockchain as a means to “elbow the utility aside,” putting more power in the hands of consumers. Others see it as a useful tool—alongside other technologies and components that make up the palette of “transactive energy”—for allowing solar, battery storage and other distributed energy resources to become more productive grid assets.

Outside of the energy marketplace, blockchain has become known as a new means to execute financial transactions, most famously through the cryptocurrency bitcoin. Through unique architecture and construction, the digital technology permits direct and secure financial transactions between individuals without going through an established third-party intermediary, such as a bank.

Using cryptography to keep exchanges secure, blockchain provides a decentralized database, or “digital ledger,” of transactions that everyone on the network can see. All of a network—essentially a chain of computers—must all approve an exchange before it can be verified and recorded.

Read the full report from CFC.