Where a bank or provider used to serve as an intermediary, there is now a more decentralised method for transactions: The blockchain. Behind it is a digital process that allows you to store and forward money, information or other things that can be recorded in data. Sensitive data is handled with a high level of security. Wattify uses the blockchain to record the energy generated by its projects — and it is climate neutral! You also receive the return from the projects you support conveniently and transparently in the form of tokens with the help of the blockchain. Find out how a blockchain works and how Wattify uses it in an environmentally friendly way here.
How does a blockchain work?
Think of blockchain as a kind of modern accounting. The data to be recorded is stored in digital blocks that are linked together to form a chain. Data stored in a block generates a so-called “hash” for the block. This is a digital fingerprint consisting of a combination of letters and numbers. Like a fingerprint, each hash is unique. You can recognise from it which block it is and which data is recorded in it. If a new block with new data is created, it receives the hash of its predecessor in addition to its own hash. The two are now linked and a chain is created.
How is the data in the blockchain secured?
If someone were to try to manipulate the data in a block, the hash of the block would change along with the data. The subsequent blocks would then be invalid because they do not have the new hash. To prevent a fast computer from simply recalculating the invalid hash, there is the “proof-of-work” mechanism. The mechanism slows down the production of new blocks and makes recalculating all the blocks of the corresponding chain segment too costly. Another precautionary measure is the distribution of backup copies to all participants represented in the network. So everyone keeps a decentralised record at the same time. Everyone has insight into the blocks of a chain in which they participate and can confirm their validity and add new blocks. Thus, a democratic consensus always prevails in the blockchain. There is no need for a third party to verify the data. The transmission of information is faster and cheaper.
What is a blockchain used for?
The secure and decentralised infrastructure of a blockchain offers numerous possible applications. The most widely used is the transaction of money in the form of cryptocurrency. You’ve probably heard of Bitcoins and Co. If you want to send money to someone in this way, the data of the transaction — sender, recipient, amount — is stored on a block and authorised via the methods mentioned. The production of cryptocurrencies or any variant of a cryptovalue or cryptoasset also takes place on the blockchain. Sometimes crypto assets serve a purpose other than just being a means of payment. For example, they can represent your profit shares or voting rights. In this case, they are called tokens instead of coins. Blockchains set up specifically for this purpose are responsible for mapping and legitimising your tokens.
But blockchain technology could also be used to sort patient files, notarise documents or organise the counting of votes. Any application is conceivable that requires data records to be stored transparently and securely. One catch is that this costs electricity. Digital databases like a blockchain have to be hosted by servers and managed by computing systems. The computers, in turn, probably draw their energy from sources that burn coal or gas. This leaves open the question: How do we make the process of a blockchain climate-friendly?
Wattify’s climate-neutral blockchain
We equip every project on Wattify with smart technology when it goes live. The technology allows us to continuously record the energy generated in a climate-neutral blockchain. In doing so, we break down an impact project into many crypto securities. These securities are ultimately your tokens and digitally represent, for example, a PV park on our blockchain. This means a daily pro rata return for you and all other investors, depending on the energy generated on the day — transparent, decentralised and secure.
Contrary to popular belief, Wattify nodes are carbon neutral because they are built on Smart Meter Gateways (SMGW). SMGWs are communication units with an integrated security module. As part of a smart metering system, they ensure the grid-serving control of consumption and generation plants. Wattify relies exclusively on renewable energy sources — i.e. they are connected to the solar, hydro, biogas or wind farm plants from which they draw their electricity. This net zero property makes the Wattify blockchain unique — the first true net zero blockchain on the market.
Now you know how a blockchain works and how Wattify makes it carbon neutral for you. What if you could experience this innovative technology first-hand? You can! Become part of our Wattify community! We are looking forward to meeting you.