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Ties Between Blockchain and Prosumers

Updated on October 24, 2016

When the term “prosumer” was devised by the American writer named Alvin Toffler in 1980s, the concept seemed almost entirely futuristic. These days, however, it is steadily gaining tangible applications, denoting a framework of stepping away from the traditional centralized service providers.

The idea is to blur the delineation between two standalone parties in an arbitrary interaction framework, namely the manufacturer and customer. The domains where prosumers are already appearing as a standalone cluster include social media, electric power production, and data storage. The common denominator across all of these contexts is blockchain, which allows for accurate recording and processing of transactions.

Uniqueness of the Steemit Social Media Platform

Steemit isn’t a run-of-the-mill social media because it introduces a principle where contributors and moderators are rewarded for unique content. Furthermore, its authors chose to contrive a cryptocurrency of their own rather than leverage Bitcoin or any other existing system. Anyone on this network can earn digital points dubbed “Steem,” where one unit is currently worth $2.02. To collect these points, users need to create original, captivating content or upvote posted entries such as articles and videos.

Steemit’s guidelines also presuppose the option of downvoting blockchain data in the event a user’s materials are found duplicate. This is, obviously, a self-contained ecosystem where postings and transactions, including payouts, are robustly monitored by the community.

The company uses the so-called Steem Power to issue a 50% share of all payouts to members. Steam Power denotes a long-term deposit that can be used over the course of 24 months and needs to be broken down into as many as 104 payments. This restrictive approach encourages a lasting partnership with the platform.

To measure the success of Steemit, it suffices to take a look at the cryptocurrency market capitalization chart, where Steemit ranks the third. That’s a remarkable benchmark for this relatively new project that’s currently in beta testing.

Yours, a Payment Processor Leveraging Blockchain

At the first blush, it may seem that the makers of the proof-of-concept micropayment system called Yours didn’t bother reinventing the wheel. As opposed to Steemit whose authors created a new cryptocurrency for their operation, Yours chose to revolve around Bitcoin instead. However, there are quite a few novel things under the hood.

First of all, the platform is going to charge much smaller fees for processing online payments – 1 cent on average for most transactions. Compared to Bitcoin proper, where the fees can reach 5 cents, and the PayPal system, where users have to cough up around 30 cents, the terms provided by Yours are much more attractive.

Ryan X. Charles, an engineer working on this project, argues that the use of Bitcoin’s blockchain is a great avenue for cooperating with the largest and most reputable parties involved in this fastest growing cryptocurrency domain. Furthermore, blockchain significantly facilitates scaling and tackles critical security challenges. The detailed online ledger can also serve as a mediation tool in disputes between members.

As soon as extensive testing is completed, the next phase of this initiative is to integrate the technology into an application, including a mobile version, for everyone interested to install and use for micropayments at amazingly low fees. Meanwhile, the community looks forward to the official release of this smart contract system.

Blockchain and Social Media Censorship

Social networks based on blockchain are bulletproof against different forms of censorship. A person who is contributing content to such a platform technically owns it, which is per se a strong countermeasure for manual interference, including removal or obfuscation. Besides, in a decentralized network, blog posts, videos, and other entries are timestamped and stored permanently. The blockchain technology, therefore, allows users to express their ideas without limits and debate over controversial issues without worrying about censorship. A recent incident where Facebook admitted blocking links to WikiLeaks’ email dump is an example of what may happen otherwise.

Prosumers in the Energy Grid

As the use of solar panels is gaining popularity worldwide, a large-scale decentralization in this domain is imminent. Multiple households are becoming autonomous energy-wise and can do perfectly well without the services of power supply monopolists. Moreover, if there is an overproduction of energy, people can sell it off. The role of blockchain in this framework is critical – it provides a platform that allows individuals and organizations to purchase and sell self-produced energy.

NRGcoin, Digital Currency for Smart Grids

NRGcoin is a cryptocurrency used in the decentralized blockchain for energy trading transactions, where 1 NRGcoin is the cost of 1 kWh (kilowatt-hour). This principle is applicable in scenarios where a household’s solar panels produce more energy than the prosumer needs, so they decide to sell the excess power to another party on the so-called smart grid. Blockchain is used to verify and record all transactions of transferring NRGcoins from buyer to seller. People can further convert this cryptocurrency into cash via ad hoc exchange services. NRGcoin poses a strong incentive for people to install solar panels and generate renewable energy. This promising project is currently isolated to the European market and, unfortunately, hasn’t got a significant reach at this point due to regulation hurdles.

Ethereum Blockchain Administering Energy Transactions

A resident of Brooklyn, New York, pioneered in harnessing distributed ledger technology to sell redundant solar energy to his neighbor in March 2016. This proof-of-concept transaction was backed by a tandem of the LO3 Energy company and the ConsenSys blockchain technology provider, both representing an initiative called TransActive Grid. The above-mentioned ConsenSys firm leverages the Ethereum blockchain app platform that runs smart contracts to enhance security and thwart third-party interference. By the way, most of the present-day peer-to-peer energy transaction projects rely on Ethereum, including Grid Singularity, Powerpeers, and SolarCoin.

Decentralizing Data Storage

Cloud storage providers are often victims of cyber-criminals. Crooks attack them with new crypto viruses or DDoS attacks and require ransom payments. Blockchain is a useful tool for bolstering the security and integrity of cloud storage. Whereas the commonplace cloud service providers keep their customer’ data in a centralized fashion, a compromise by threat actors or a hardware malfunction can effectively render large volumes of information inaccessible in one shot. The blockchain technology allows architecting online storage repositories that have no single point of failure. With such a platform in place, data is distributed across the network so that unforeseen circumstances or a hack will have no critical impact overall.

The Storj project fully demonstrates the virtues of this principle. It boasts a distributed infrastructure where the role of prosumers is immense. Users can both rent a necessary amount of cloud storage and sell their excess space if any. For instance, if a person has quite a bit of unused hard disk space or a standalone hard drive that can be allocated for this purpose, they can earn money by joining the end-to-end encrypted, distributed storage. This two-way system is backed by a specially crafted cryptocurrency called Storjcoin X (SJCX), one unit being worth $0.12. At the time of writing, Storjcoin X ranks the 26th by capitalization among all cryptocurrencies. Owing to a robust blockchain, all Storj transactions are accurately logged so that everyone involved gets their benefits.

Summary

The IT community is witnessing a spike in new implementations of the blockchain technology as well a rapid growth of the existing ones. The current niches with the prosumer at the forefront include social media, energy grid, and cloud storage. It’s certainly fascinating to observe this progress and innovation, but it’s yet more exciting to speculate about what the future may hold.

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    • Paxash profile image

      Darcie Nadel 10 months ago from Louisiana

      I did a transcription of a presentation recently where the speakers were discussing blockchains, but I had no idea what they were talking about. Thanks for writing this article. It gave me a much better understanding.