How Decentralization Can Revolutionize The Energy Sector

How Decentralization Can Revolutionize The Energy Sector

Blockchain technology and Cryptocurrencies have brought about digital autonomy, decentralization, and have enabled people to circumvent the corporate strangleholds among other things. These are things, that a few years ago no one ever thought they would ever happen. How can you transact without government-issued currencies? How can you create your money and spend it just like state-issued currencies? Thanks to technology, all these things, and others are now possible.

Centralization In Major Industries

In the banking sector, centralization was introduced to bring security and stability. Furthermore, consumers have benefited from the ease of use. Although banking has played a major role especially in trade and enabling entrepreneurs to access capital, the sector is also plagued by many challenges. To remain viable, banks always charge high interest rates on the loans to the disadvantage of the loanees.

In the energy sector, participation is only restricted to massive corporations. For many years, the sector has relied on huge capital to operate. Installing coal plants, nuclear facilities, or constructing dams to generate electricity are expensive ventures reserved for governments. The distribution of power to different places is also a huge investment that individual investors cannot accomplish.

How Centralization Has Failed

Although centralization was created to bring benefits to the citizens, it has not always achieved this goal. When startups want to get loans, the process is always painful and the available options drive away many potential entrepreneurs. Inflation and currency manipulation are among other major challenges with the centralized banking system. The 2008 Financial Crisis is a perfect example of the ills of the current banking system.

Whereas the internet has helped to make the world a global village, it’s centralization has led to the emergence of large companies that handle data from millions or even billions of their customers. Cases of use of users’ information without their consent have been on the rise recently. Most of these companies use this data to generate their huge profits without compensating their users for their contribution.

Decentralization In The Energy Sector


Technology has revolutionized the energy sector. A few years ago electricity production was such a large scale process that only governments could accomplish. Today, the emergence of renewable energy has made possible for anyone from around the world to generate their electricity. Do we really need centralization in the energy sector?

For decentralization to function, there is a need for a network of participants. Furthermore, decentralization requires the users to be active. However, this can be achieved through automation of some processes. Blockchain technology could be used to help neighborhoods to share their renewable energy. But wait, have we mentioned that centralized companies hold the power systems? And these monopolies act as intermediaries requiring individual green power generators to first sell the power to them before reaching the final consumers.

The use of blockchain technology can enable clean power generators to circumvent these intermediaries and deal with the consumers directly. This can go a long way in reducing the cost of power significantly and enable consumers to do more with electricity at a lower cost. Decentralization in the energy sector will make it easy for the renewable energy power producers to sell their excess power to their neighbors.


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