**5. Smart grids and blockchain**

The blockchain-based shift in paradigm is brought by a 2008 article of Satoshi Nakamoto [29], which sparked a true revolution for the future use of Internet. The base layer of these changes signifies that it brings fundamental change in the fabric of the Internet, changing it form an *Internet of information* to an *Internet of value* [30]. The core function of the latter is that it enables peers to exchange values over the net, without fear of getting ripped off. The distributed nature of micro-grids is naturally adoptable by the inherent distributed profile of blockchain. Blockchain is operated using a distributed ledger, which is available to all participants to a common blockchain-based market scheme. The ledger is the receptacle of truths; each and every transaction is being verified, timestamped, ran through an advanced crypto machine, and added to the ledger. Another intrinsic secure feature of the ledger-based transactions is the fact that each transaction is traceable and is validated only by the transaction which preceded it. This architecture is basically sound for any security beach, since a hacker who gains access to the platform and wants to change a section of a ledger must change all the sections contained in the distributed ledger, to all peers. The success of this endeavor is virtually impossible.

The smart grids are basically arrays of technologically backed generation units, intelligently linked to the consumption units, which are the beneficiaries of wisely developed utilization strategies. These strategies sprung from the need of optimization of the usage of energy assets, in order either to maximize the revenues or minimize the losses, either energy or monetary wise.

The two apparently disparate paradigms show peculiar similarities with respect to the common management policies. By concealing the operation of the system (either physical or software) to a mathematical algorithm, designed to act as a business enabler for the lucrative peers, as well as a solid-rock guardian for possible intruders, the marriage between physical micro-grid (or smart grid) and the automated and collaborative system peer-to-peer blockchain network could be the best follow-up yet.

However, every technological breakthrough has both a bright side and a notso-bright side. The latter one resides in the inherent energy-intensive nature of blockchain-based technology, which is an energy-intensive technology, which pays tribute to the constant care for locking down the information and continuous search for certitude in keeping the peers out of reach of hackers, activity which implies constant checking (every 10 seconds) of proof of work in every ledger at every peer, irresponsive to the continuous energy trading process. This feature of blockchain will need further improvement, since the energy quantities transitioned over micro-grid energy markets are small, and the overall gain of the community risks to become negative.

### **6. Conclusions**

This chapter has discussed the framework of current electrical power system development into more elaborate and complex forms, which entails the *sine qua non* presence of the Internet. Energy efficiency domain is converging with the need for

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**Author details**

Romania

provided the original work is properly cited.

\*Address all correspondence to: radu.porumb@upb.ro

Radu Porumb\* and George Serițan

© 2019 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/ by/3.0), which permits unrestricted use, distribution, and reproduction in any medium,

University POLITEHNICA of Bucharest, Faculty of Power Systems, Bucharest,

*Integration of Advanced Technologies for Efficient Operation of Smart Grids*

power quality improvement in the advent of smart grid solid-state technologies. This trend is supported by the seamless integration of IoT at both generation and consumption extremities, as well as their evolution toward micro-grids and smart grid, economically enabled by the blockchain-based micro-market schemes.

*DOI: http://dx.doi.org/10.5772/intechopen.83570*

*Integration of Advanced Technologies for Efficient Operation of Smart Grids DOI: http://dx.doi.org/10.5772/intechopen.83570*

power quality improvement in the advent of smart grid solid-state technologies. This trend is supported by the seamless integration of IoT at both generation and consumption extremities, as well as their evolution toward micro-grids and smart grid, economically enabled by the blockchain-based micro-market schemes.
