Off-chain state channels in the energy domain

Abstract

Blockchain technology has attracted attention in the energy domain as a new decentralized infrastructure, with startups and researchers presenting new solutions to bring the benefits of decentralization to energy-related use cases. However, blockchains, or more specifically, public permissionless blockchains do not scale well. Scalability of blockchain solutions is often left as future work. Off-chain protocols such as payment channels, or in general, state channels are ways to improve the scalability of blockchain-based applications. The benefits of these state-of-the-art state channels in scaling blockchain-based applications in the energy domains have still not been investigated. Thus, we present a methodology to indicate if the various use cases in the energy domain benefit from state channels. Furthermore, we systematically assess these use cases by applying our proposed methodology. We found that state channels improve the scalability of various energy-related use cases, such as energy trading, and help in solving energy optimization problems