What is ‘Blockchain’?

What is ‘Blockchain’?

The “Blockchain” is the technology supporting Bitcoin, the infamous cryptocurrency known for being the first widely used and reportedly used in some criminal activities. Blockchain is also the technology underlying Ethereum, which is also a means to implement smart contracts. There is an increasing interest around Blockchain because it promises disruptive changes in banking, insurance and other sectors narrowly involved in everyday life. In this blog entry, I will try to explain what is Blockchain and how it works. In the next entry, I will present some uses in the energy sector.

Blockchain is an account book, a ledger. It contains the transaction records made between two parties, like “On April 3, John sold 3 potatoes kilos to Anthony and paid 1.05 Euro”. The way Blockchain works avoid any malicious change in the records. This feature is not granted by a supervisor, but is a consequence of the consensus reached by all peers participating in the Blockchain. This has consequences of paramount importance. For instance, when Blockchain is used to implement a payment system, like Bitcoin, it is not needed a bank supervising and facilitating the transaction anymore. Even it would not be necessary to have a currency as we currently have.

The blockchain is a decentralised application running on a peer-to-peer protocol, like the well-known BitTorrent, which implies all the nodes in the Blockchain have connections among them. The ledger is stored in all the nodes, so every node stores a complete copy of it. The last component is a decentralised verification mechanism.

The verification mechanism is the most important part because it is in charge of assuring the integrity of the ledger. It is based on consensus among nodes and there are several ways to implement it. The most popular ones are the proof-of-work and the proof-of-stake.

The proof-of-work is the most common verification mechanism. It is based on solving a problem that requires certain amount of computing effort. In a nutshell, the problem is to find out a code called hash using the block content (a block is a set of recent ledger inputs). The hash is unique for a given block, and two different blocks will always have different hashes. The majority of the nodes must agree in the hash value, and if some of them find a different hash, i.e. if there is no consensus, the transactions in the block are rejected.

Applications based on Blockchain can be classified into three different categories according to their development status. Blockchain 1.0 are the virtual cryptocurrencies like Bitcoin and Ether. Blockchain 2.0 are the smart contracts. A smart contract is a contract with the ability to execute by itself the agreements contained in it. This is done with no need for a supervisor who verifies the contract compliance. Finally, Blockchain 3.0 develops smart contract concept further to create decentralised autonomous organisational units that rely on their own laws and operate with a high degree of autonomy.

In my next post I will present some smart contract applications in the field of energy delivery.

The Internet of Things and the electricity bill

The Internet of Things and the electricity bill

Internet of Things (IoT) are becoming common. These are the objects that connect to Internet by themselves to carry out their duties with no human intervention. One possible application that can help us to save money and to reduce greenhouse gasses emissions is the remote control of domestic devices featuring thermostats. These devices are the conditioning air, electric heaters, fridges, heat pumps and heating. While heat pumps are not common in many European countries, gas heating is widespread. Although the latter is not electricity driven, the same ideas can be applied because it relies on a thermostat. The important feature shared by all those devices is that they have thermal inertia, which means there is no significant effect if they are switched off for a reasonable period.

The first step is to connect to Internet the devices. There is technology available in the market to do this, like the Siemens’ Synco Living series or the devices manufactured by Greenwave Systems. This technology enables users to remotely access the aforementioned devices.

The next step is to allow the electricity company to control the thermostats, so they will be able to change the temperature set-point when some conditions are hold. For instance, in the case of the air conditioning, it means they will be able to increase the set-point up to certain threshold or for a certain amount of minutes every hour.  In return for allowing changing set-points, the customer will have discount in his electricity bill.

Dryer connected to a smart switch

We have to consider companies do not participate in this scheme for the love of humankind, but because of the benefits they gain. What the company is really doing is to buy the customer’s flexibility. The flexibility is the energy the customer is willing to save if there is a return. When the company aggregates the flexibility of many clients, they find they do not need to produce or to buy a huge amount of energy which leads to big economic savings, in particular under unforeseen circumstances like some weather events.

But these programs that are profitable both for the companies and the customers have an even more interesting side; they foster the integration of renewable energies in the grid. The problem with renewable energy is that it cannot be scheduled, as it occurs with conventional sources. As a result, we have energy when there is no demand or the demand can concentrate when the wind does not blow. Demand response programs, this is the name for the described scheme, enables companies to use the aggregated customer’s flexibility to reduce energy demand when renewable sources are weak. In this way there is no need to build CO2 emitting reserve power stations, which are very expensive because they are not continuously running.

Demand response programs can be seen as a case of Internet of Things (IoT) and they are not common in Europe, at least among domestic customers, as it occurs in the USA. These programs allow citizens to be directly engaged in the promotion of renewable energies and in the reduction of greenhouse gasses production. They are a kind of everyday life perturbation, and some people could perceive it as an intolerable intromission. However, we have to consider almost all of us have a product called flexibility we can sell to the electricity companies and, at the same time, it is a personal involvement in climate change mitigation.

IoT, farming and market

IoT, farming and market

Agriculture and husbandry are economical activities with high social value in some places around Europe; they have an important share in the economy of many European regions and the European Union devotes a significant part of its annual budget to farming and the related rural world. In spite of this, farmers usually have lower incomes than other citizens in the same social and cultural conditions.

Since the coming of the Enlightenment Age farming has enjoyed technical improvements that increased farming outcomes. During current century, Internet became a widespread technology and the Internet of Things is getting common. Both farming and husbandry will benefit from the Internet of Things. Is about machine communication and it relies on cloud computing and sensor networks. It is mobile, virtual and required reliable and fast data connections. It allows machines and processes to sense the environment and provides the intelligence needed to allow them to optimise by themselves.

Precision farming may be the first application of Internet of Things in farming. The key is to install sensors to gather data from all the farming processes and to make decisions based on data in an automated way. Soil, plants, livestock, machines, weather can be monitored and actions can be taken to reach exploitation targets in an optimal way, as we reported here.

Although IoT can improve farming activity, we must keep in sight the prices farmers are payed depend on the market. Currently in Europe there is a market deregulation and therefore farmer incomes depend on the market whims. In this scenery, to organise the offer could help farmers to preserve their interests. Could IoT help to organise offer?

Imagine a region where all the farms use the IoT in their everyday activities. They use it to efficiently develop their work and they measure all the important parameters that allow knowing their state and performance. Imagine now that all the farms are connected and share the information gathered by the sensors. Finally, assume the network has intelligence.

Besides the farms information, that artificial intelligence receives information about who and where are the ones that potentially would buy farms products, how much the pay, how is production in other competitor regions, what are the forecasts for market and weather. Putting together all that information, that artificial intelligence would manage the farms by suggesting farmers different operations in order to maximise the delivery price. For instance, the artificial intelligence using available information may conclude that the maximum price for a given product could be reached if certain amount of tons is offered to a defined buyer a precise day. Among all the farms in the network, the artificial intelligence would choose those where the product is in the optimal maturation moment and would inform the farmers about the circumstances so they could proceed with harvesting and transport.

A schema like the one proposed would transform farms into things connected to Internet and smart enough to optimise the farming revenues by themselves. And it would be another technical innovation in the row started centuries ago that would improve farmers live.

Internet connected agriculture

Internet connected agriculture

Agriculture is a so old human activity that popular wisdom is full of proverbs and sayings giving recommendations about the best way to precede in farm duties. Popular wisdom along with the knowledge transmitted from parents to children has determined agriculture practice for centuries. Only in 20th Century the advent of machines and chemical fertilisers and pest-controllers started to change the conditions.

Sensor Yara ALS (Active Light Source) to estimate the nitrogen needs.

Nowadays agriculture has to face a changing scenario. New cultures, new policies, less water available, less public tolerance towards chemicals, less people attracted by rural life, emergent countries and the market dominated by a few, big actors. This changing situation leads agriculture to adopting industrial-like principles: process optimisation, cost reduction, performance improvement.

Information and Communications Technologies (ICT) and Internet of Things (IoT) can help to improve agriculture activities according to the new paradigm. These technologies are related to the ability to generate, to process and to use data from the agriculture process.

Data source can be sensors in the process and activity logs. When data are accessed through Internet and processed in the cloud to provide autonomy to the process we have an IoT process because it is not the farmer who is using Internet but the things themselves, where a thing is the field, an irrigation device or a combine harvester. Let’s see some examples that can be applied to improve agriculture.

An irrigation system can be automatized using moisture sensors buried in the soil. When the moisture reaches a critical value determined by the farmer, the system starts to work and will go on while the moisture is below the threshold. When the field is wide enough sensors can be placed along it, and the irrigation system can apply different water flows depending on the local conditions. The system can be improved by incorporating weather prediction, which can be used to delay the irrigation when rains are foreseen. Alternatively, the system can warm the farmer who will make a decision based on the information provided by the system.

Other example is a combine harvester equipped with a sensor able to measure the production per square meter. At the end of the task, there is a map of the field reflecting the production meter by meter. This map can be used during the next season to adjust the fertilisation according to the local needs. Moreover, the most suitable time to fertilise is automatically computed considering weather and soil conditions and the forecasted values.

All these techniques based on sensors, data processing and Internet access to the data, machines and fields allow to improve the farm yield and to reduce the use of resources. At the same time, they allow to cover the blanks caused to popular wisdom by this changing world.

Is the Artificial Intelligence a threat for your job?

Is the Artificial Intelligence a threat for your job?

There is a growing concern caused by the possible effects Artificial Intelligence (AI) could have on everyday working life. Recently in the Davos Forum they have dealt with this issue, but two years ago The Economist published an article about the potential job lost that will be caused by this technology.

Films have made Artificial Intelligence familiar to everybody. From Colossus: The Forbid Project, where a super-computer managed to dominate the entire world and stole the girlfriend to its designer; to Ex Machina, where a heartless machine managed to fulfil its ambitions with no moral hesitation. Almost in all cases, it has been portrayed in a dystopian way.
However, the AI we will see soon will not look like an android, as Ava in Ex Machina, but it will resemble HAL 9000, the moral disoriented computer from 2001: A Space Odyssey. I think the first AI materialisation we will see is the Cognitive Computation, named by IBM as Watson.

Watson is a machine able to answer questions posed in natural language capable of processing huge amounts of information to give the correct answer. It became known to general public in 2008, when it defeated two human opponents in Jeopardy!, a television contest featuring a quiz competition.

One of the first commercial Watson uses is to support lung cancer treatment by suggesting the best drug combination for every patient. Another application soon available will be to answer call phones in a call centre. Genesys, a company that develops and sells systems for that application, wants to include Watson in its portfolio. Watson will answer the phone, have a conversation with the user and refer him to a human operator if needed. The experience will be quite similar to the current one, but a machine will do a job that requires some intellectual abilities.

Aptitudes like the ones featured by Watson fear analysts there will be a job lost there where intellectual and routine tasks are done, even if qualification is needed as in accounting, layer assistants, technical writers or drivers. This is similar to fears arisen when the artificial force appeared: machines whose power enabled them to do the same work than a dozen people while they were driven by only one.

Technology has improved artificial force. While at the beginning it was powered by steam pressure, today it is enabled by automation and robotics. Artificial force ousted many workers and make some professions disappear but, at the same time, new jobs requiring higher qualification emerged. Workers had to do a transition from muscle to brain.

On the advent of this new Artificial Intelligence technology, able to carry out intellectual, repetitive tasks, how will be the new transition workers will have to do? It will have to aim at those tasks machines by the moment cannot do: creative and emotional jobs. However, the transition period could be not easy. Required formation could not be afforded by everyone, or to hire a machine could be cheaper than to hire a person. AI cost will be determinant and, considering only Watson hardware cost around three million dollars, it seems not every company will be able to access it.

In any case, we will have to face the old question: to let others to develop the technology and became mere users, or to be the scientific, technological or commercial developers of this new industrial revolution. A Hamlet like decision.