top of page
  • jkb4242

The Rise of Smart Meters and Blockchain Technology

Updated: Oct 18, 2023

By Jaya Bijoor

Metering allows utility companies to track the amount of energy a consumer uses and bill them according to usage. In the past, conventional meters worked fine as they manually tracked energy consumption over a period of time, and the user was billed for that period.

However, conventional meters don’t measure up as the energy grid becomes decentralized. Traditional meters are not designed to handle demand-based price fluctuation like smart

meters can.

Smart meters can mirror the digital transformation of the energy grid that is taking place. Smart meters contain digital data transmission capabilities, allowing two-way communication between the meter and the grid. Smart meters track personal energy consumption in real time, allowing consumers to decrease consumption quickly. Consumers would also get consumption data by time and price to see when they consume more or less energy and the cost associated with their usage levels.

Consumers can use this data to reduce their energy costs and carbon footprint. For example, if energy demand is lower during the middle of the night, the smart meter could be programmed to turn the dishwasher on at 2:00 a.m., lowering the cost of washing dishes compared to during the day. We can also leverage smart metering to manage energy usage

across neighborhoods. For instance, increased electric car ownership has increased the demand for charging facilities. With smart meters, consumers can program their meters to

charge their cars when demand is at its lowest. Smart meters will monitor the energy load on the grid, and once the electrical load decreases, the meter will initiate charging.

Smart meters help consumers save money, optimize their energy usage, and take advantage of the transparency offered by decentralized digital energy grids. Smart meters have some

downsides, though, as it relates to security and privacy. On the surface, data about personal energy consumption might be too superfluous to be dangerous. Still, bad actors can use this data to figure out when residents are not in the home and break in to commit theft. Often, smart meters are tied togetherand communicate with each other. For example, somebody

could hack smart locks on garage doors, giving thieves access to the home. Or a malicious person could change consumption data transmitted to the grid, changing the bill a consumer

receives for their consumption.

In 2009, cyber attackers hacked into a Puerto Rico utility’s smart meters and stopped all consumption recordings, which led to a loss of four hundred million dollars. As recently as

2022, Russian hackers shut down parts of a Ukrainian power grid, leading to a mass blackout.

Fortunately, blockchain technology offers a solution to many of these cybersecurity issues. If all smart meters are on a blockchain-based platform, even if someone hacks a smart meter to gain access to the grid, they can’t do much damage since there is no single point of failure with a decentralized grid. Most smart meters would need to be hacked within the network to do significant damage, which is not easy.

Cryptographic keys make blockchains secure. Using blockchain makes smart meters secure. If a smart meter does not utilize cryptographic keys, a hacked meter can pretend to be another meter. Blockchain-based smart meters do not allow this, as a private key only works with its corresponding public key. This secure communication method would eliminate most of the security vulnerabilities that smart meters pose today.

Blockchain-based smart meters increase transparency. Since we can’t change the recorded smart meter data once it’s publicly available to all participants on the blockchain, consumers can use it to make better decisions. For example, if a consumer wants to buy a house, the consumer could review the detailed historical energy consumption instead of depending on estimates from the real estate broker. If the energy usage is high, then that might signal the windows need to be replaced or the walls need better insulation.



bottom of page