The use of centralized technology and manual practices in the energy industry have proved to be inefficient, and are also prone to error and fraud. Blockchain Technology Partners (BTP), the enterprise blockchain company, believes that blockchain technology can be greatly beneficial to the energy industry. They joined LF Energy last year seeing that they could contribute to the debate and the discussion in this vertical.
“The best way of thinking about us as a company is we’re an enabler. Blockchain and associated technologies, smart contracts and also providing support for information security go together in our mind to create a platform on which you can then build and develop new and interesting applications,” says Duncan Johnston-Watt, CEO and Co-Founder at BTP, on this episode of State of Energy.
Key highlights from this video interview:
- BTP set out to solve the challenge of deploying and managing blockchain infrastructure in the enterprise blockchain space. Johnston-Watt discusses the company’s progression during the four years since its inception and where the company’s key focus lies.
- Johnston-Watt discusses the generic use case of provenance and how it applies to the energy industry. He explains how spreading the DLT out across the industry and the participants can be beneficial.
- Johnston-Watt explains the scope of blockchain beyond tracking inventory. He explains how BTP bridges the gap between the platform and its application in a particular domain.
- Johnston-Watt and Csilla Zsigri, VP of Strategy at BTP, discuss the role security plays in the energy sector and in blockchain. They explore the idea of secure by design rather than security being an add-on to a platform.
- BTP discusses their motivations behind joining LF Energy and what role they believe they may play in the future.
- We are facing a number of climate change challenges, needing to improve the entire carbon credits and carbon offsets market and create a way of auditing all of these credits. Johnston-Watt discusses the role LF Energy is playing in bringing people together to tackle these challenges.
The summary of the show is written by Emily Nicholls.
Here is the automated and unedited transcript of the recording. Please note that the transcript has not been edited or reviewed.
Swapnil Bhartiya: Hi, this is your host, Swapnil Bhartiya, and welcome to TFiR State of Energy show. And today we have with us two guests from BTP, Duncan Johnston-Watt, CEO and co-founder, and Csilla Zsigri, VP of office strategy. Csilla, Duncan, it’s great to have you both on the show.
Csilla Zsigri: Yeah. Hello, great to be here.
Duncan Johnston-Watt: Hi. Yes. Glad to be here.
Swapnil Bhartiya: So, I would love to know a bit about the company. What is the company all about? What do you folks do? And since Duncan, you are a co-founder, what is the problem that you saw in this piece that you felt you needed to create a company like this?
Duncan Johnston-Watt: We are a young company, so just coming up for our fourth birthday. At the BTP, we really set out to solve the challenge of deploying and managing blockchain infrastructure. So, my background, and my co-founder Kevin’s background, is all around working with large scale distributed systems, and we could see an immediate and pressing need to apply that knowhow to the enterprise blockchain space.
The company’s obviously evolved over time, over the past sort of nearly four years, but essentially the way we think of ourselves now is we are providing enterprise blockchain middleware. We actually call it multiparty middleware. So, our focus being on providing a very strong, stable platform on which companies can then innovate and develop new multiparty applications and services.
Swapnil Bhartiya: Excellent. Thanks for explaining about the company. Now, since the name of the show, the focus is going to be the state of energy, energy sector. Tell us a bit about why, and when you felt a need to also serve this sector.
Csilla Zsigri: I mean, I guess the short answer is that obviously blockchain technology can be used across industries. We believe that the energy sector in particular can greatly benefit from this technology. I mean, generally speaking, the energy industry has a broad and diverse set of market participants. And this creates a lot of friction on several fronts when this market participants come together and collaborate, right?
And I think current common practices such as the use of centralized technology, manual practices that are still being used, have proven to be very inefficient, they are also prone to error and fraud, and we believe that blockchain and associated technologies can really alleviate these frictions or problems.
Swapnil Bhartiya: If you look at blockchain technology, I mean, if you look at the whole evolution, it is kind of serving different needs depending on the industry that you look at. Can you talk about especially in the energy sector, how is it going to help the ecosystem of the companies? What is the role of blockchain technology or BTP in this space?
Duncan Johnston-Watt: From a practical standpoint, what we’re actually looking at as a sort of generic use case is provenance. Provenance could be applied very broadly. So, provenance really means tracking the sort of the life cycle of assets. And that can be any asset in any industry. It can even be digital assets, but specifically around energy. And by the way, energy has been designated one of the US critical categories for critical infrastructure, so this is a very important area to ensure that from a safety point of view and a security point of view, you absolutely know what assets have been used, say for example, to create a pipeline, and not only where those assets were sourced, so the pipe itself, but who was responsible for transporting it, who was responsible for laying that pipe and also welding it and so forth.
All of that information, all of that really can be encapsulated as what is the provenance, what is the history of that pipeline? And that has significant implications from a safety, from a regulatory point of view. And as Csilla said, certainly there are processes in place that attempt to do that today, but they are largely centralized, and the idea of using a DLT is it actually allows you to extend beyond that centralized resource. And actually in many cases, spread the DLT out across the industry, across the participants.
So, you’re capturing this critical data. You’re normally using a permission blockchain, so besides being members of the LF Energy Community, we’re also members of the Hyperledger Foundation, as well as CNCF, and most recently the Open Source Security Foundation, and all of these we see as complimentary and all contributing to us delivering what we can do as a company, but also doing it in the context of the broader community.
Csilla Zsigri: Yeah. And just to add something to that, the need to ensure provenance comes up in other areas as well, right? Another, I guess, good example would be renewable energy, which is obviously critical to sort of create a more sustainable world. And to prove that energy is supplied from a green source and consume is 100% renewable, you need to use digital technologies that can allow that. And right now that’s not really the case, and we believe that blockchain technology can really help to achieve that.
Swapnil Bhartiya: What are the other areas, or what is the scope beyond just tracking physical inventory there?
Duncan Johnston-Watt: That was really just one example of provenance in action. When you talk about supply chain, this is outside of the energy sector, but we’re working closely with companies in healthcare where again, the issue of being reliable, being accurate, being immutable is really to the fore.
The best way of thinking about us as a company is we’re an enabler. This is one of a number of technologies, you hinted at that yourself when you said it’s blockchain and associated technologies. It’s also smart contracts, and it’s also providing support for information security. All of those components go together in our mind to create a platform on which you can then build and develop new and interesting applications.
And we have this term inside the company, “Bridging the gap.” The gap really is a gap between the platform and its application in a particular domain. And so we found ourselves getting involved in really helping to act as a catalyst. So, not just providing the platform, but also providing some of the expertise to help people bridge that gap.
Swapnil Bhartiya: I mean, if you look at the whole grid infrastructure in today’s world, it is also becoming software-defined. It is no more black boxes from old time, even subsystems or software design, which also means that it might become vulnerable to cyber access as well, so security might become a very serious topic as it is becoming in other spaces as well. Do you see, as I said earlier, that it could be out of the scope of this discussion, that at some point there will be effort for security also in this energy sector and blockchain or other such [inaudible 00:07:19] project might help?
Duncan Johnston-Watt: I don’t think it’s off topic at all. The way we think about it, and Csilla please jump in, is you can’t bolt security on it as an afterthought. “Oh, I need some security quick. Where do I get that?” It’s got to be actually built into the platform. And I think Csilla’s studied this for many years as an industry analyst and can probably answer this better than myself, but it needs to be embedded in the platform from the get-go. I don’t know, Csilla, if want to expand on that?
Csilla Zsigri: Yeah. No, I guess it’s just the way they put it now is like it needs to be secure by design. So, built-in security from the beginning and not, as you said, sort of patching and buying security in [inaudible 00:08:10].
Swapnil Bhartiya: When and why did you join LF Energy?
Duncan Johnston-Watt: We actually joined last summer. We actually came across LF Energy through, as you do, classically sort of being involved with the Linux Foundation, attending various events such as their member summit. What’s interesting to us about LF Energy is it’s a new breed of project within the Linux Foundation in that it’s vertically aligned with a specific industrial sector. So, healthcare is another one that LF has been focused on.
And so, whereas our previous involvement was all around the technologies like Kubernetes, like through the Hyperledger Foundation, things that Hyperledger has sorted, and [inaudible 00:09:00] and so on. LF Energy was for us a new departure because it was looking at tackling problems in a very specific domain. That’s really what piqued our interest.
And then when we looked at some of the initiatives that were actually happening within the LF Energy space and actually spoke to the team there, we felt, “Well, we could definitely contribute to the debate and the discussion and potentially over time contribute to some of the projects.” As of now, of course, we’re still relatively new members, so we’re still finding our feet and working out where can we best play a role. But the fact that they’re tackling a specific vertical, and one that we see as immensely important, and we’re already looking at ourselves independently of LF. That’s really what drove us to make the decision.
Swapnil Bhartiya: Your folks joined last year? Can you share with us what kind of discussions you were having, where you see the potential for blockchain technology, not only just energy sector, but within the LF Energy ecosystem, because they already have a lot of players, some are very big player, Alliander, [inaudible 00:10:11] and all those folks. Talk about what kind of discussions are happening around blockchain there.
Duncan Johnston-Watt: Unfortunately I can’t tell you who we’re working with, but I’m sure in due course we can, but we can share this, but we’re working with one of the SI’s, working specifically with their experts within the energy sector. From our point of view, we feel it’s always right, and in fact, it’s actually beneficial to us to be involved with the broader community. And in this particular case, this SI has a very strong track record in the energy sector. So, we’re also keen at some stage to convince them to also join the LF Energy initiative.
Now, that’s a little ways off, but I think from where we sit or fit, it is, back to what I was saying earlier. It’s about enabling innovation. And so that’s why we’re partnering with this SI around this energy sector and energy use case more generally.
Csilla Zsigri: Yeah. And within the LF Energy in particular, I mean, we are in the… We joined recently and we are in the process of learning more about the different projects, as well as seeing who are those civic partners that we can explore opportunities with.
Swapnil Bhartiya: First of all, we are, depending on how you look at it, climate change, this crisis, once again whatever term you want to use for there, what role do you think organizations like LF Energy can play there by bringing a lot of players together? Because the energy sector is a smaller space, but also the companies are big. They are in some capacity monopolies in their own space. There will be only one company in one country. So, talk about the role that LF Energy is playing in bring these players together to tackle this big challenge that is facing all of us.
Duncan Johnston-Watt: Well, I think Csilla touched on that a little bit earlier in terms of ensuring that the provenance of energy itself and where it’s coming from, and is it actually sustainable? And is it what it purports to be, essentially? That’s one example.
We were attending a round table recently where this topic also came up and somebody reminded the group that [inaudible 00:12:40], who’s one of the leads in this area within Microsoft, and is very closely involved with the InterWork Alliance, which is now part of GBBC, Global Blockchain Business Council. He made the point very strongly that actually there aren’t enough carbon credits today available to actually offset Microsoft’s needs as it aims for it to meet its targets. So, the question then arises, well, how do we improve that?
And the short answer is we need to actually improve the entire carbon credits and carbon offsets market and create a way of auditing all of these credits. And that’s something which is ongoing, and clearly, it’s adjacent to, but very close to the energy sector itself. But that’s just one part of the equation, I would say.
But we have this challenge that, are we fiddling while Rome burns? In the sense of it’s great to have these objectives and these ESG statements made by all the companies in the world. And I don’t think there’s a company now, a large multinational, that hasn’t laid out its strategy, but how do you then back that up? And so that’s an initiative that the energy sector needs to be involved in, but also many others besides.
Swapnil Bhartiya: Duncan and Csilla, thank you so much for taking time out today. And of course, talk about BDP and the potential for blockchain technology in not only LF Energy, but energy sector in general. And you also shared some use cases. I’m kind of curious about the projects that you folks are working on, so I’d love to have you back on the show whenever there’s some progress, but I really appreciate your time today. Thank you.
Duncan Johnston-Watt: Thank you. And we look forward to coming back on the show when we have more to share.
Csilla Zsigri: Yeah. Thank you so much for having us.