ELONCITY Raises $20M For Blockchain-Based Energy Grid
ELONCITY, a new energy distribution model, is one step closer to becoming a reality. The AI Grid Foundation announced today that it has raised $20 million worth of funding for the project from a number of different investors, including some blockchain capital groups.
The initiative was created by Andy Li, who has handled electricity distribution for data centers in the past. He also has experience in network traffic engineering and system intelligence. Now, with the help of the blockchain, he is bringing energy to everyone:
“The AI Grid Foundation’s mission [is] to promote the ELONCITY Model and enable universal access to safe, reliable, affordable, sustainable and equitable energy services for all.”
The ELONCITY model is focused on replacing fossil fuels with renewable energy sources. However, the platform has an element of decentralization as well: rather than central power plants, individual power generators will be used to make up distributed microgrids.
Customers will be able to generate their own electricity and trade it, similar to how customers of traditional power companies can sell electricity back to the grid. But there is a key difference: ELONCITY customers will sell electricity to other customers.
According to today’s release,
“Currently, Andy [Li]’s team is developing a state-of-the-art blockchain smart contract platform to empower the customers to exchange renewable electricity with each other.”
ELONCITY will also have its own token protocol, which will be instrumental in allowing customers to participate in the energy exchange.
The Bigger Picture
This is not the first attempt to distribute and trade energy on the blockchain. Projects such as Enosi, Power Ledger, and Ponton Enerchain serve similar purposes. They also offer token incentives to energy producers.
Despite this trend, some argue that the blockchain is too inefficient and too expensive to make peer energy trading feasible:
“The need to update a transaction on every single blockchain node creates significant inefficiencies…These inefficiencies are exacerbated by the fact that blockchain’s standard security relies on proof-of-work protocols, which require an increasingly challenging amount of effort as the value of a blockchain transaction increases.”
However, this argument does not take into account the fact that few, if any, of these services rely on Bitcoin or other proof-of-work blockchains. ELONCITY and most of its competitors are using custom blockchains specifically designed for their purposes.
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An Alternative To Mining?
Energy consumption has been a contentious issue in the crypto community. Mining is particularly energy-intensive, and some studies show that it is environmentally harmful in addition to being expensive.
If crypto mining becomes harder to profit from, projects such as ELONCITY may provide an alternative revenue model by rewarding users who produce energy rather than consume it.
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