Researchers and scientists have designed a fully decentralized stablecoin pegged to electricity capable of transmitting electricity without wires and costs almost free.
A team of researchers and scientists from Lawrence Livermore National Laboratory in California utilized information theory and statistical mechanics to create the new type of cryptocurrency called the Electricity Stablecoin or E-Stablecoin.
This “fully collateralized stable coin” is pegged to a physical asset and its value is dependent on its utility.
Scientists say it is capable of transmitting energy as information without the need for any interconnecting wires or a grid-based transmission system.
A first of its kind, E-Stablecoin, is the only cryptocurrency token designed as collateralized by a physical asset and fully decentralized since it uses the laws of statistical mechanics.
Scientists Jonathan Belof and Maxwell Muriado detailed in the research that appeared in the journal Cryptoeconomic Systems, how a link between information and energy paves the way for the development of a crypto token directly supported and convertible into one kilowatt-hour of electricity.
They also noted that while the minting of E-Stablecoin entails a kilowatt-hour of electricity, the digital asset can be destroyed in exchange for the electricity used in minting it.
The price of the E-Stablecoin is pegged to the price of a kilowatt-hour of electricity — an impressive system that does not rely on a third party, an institution, or a payment system to function.
“Any anonymous party can mint an E-Stablecoin token with the input of roughly one kilowatt-hour of electricity. They can then transact with the digital token like any other cryptocurrency, or even turn it back into usable electricity — all without the need for electrical power companies, electrical transmission lines, permissions, or authorities. It is a trustless system from top to bottom,” Muriado explained.
The scientists described their work as a proof of concept and used advanced mathematics to support the logic behind it.
To make the Electronic Stablecoin functional, scientists claimed it would require “further advances that increase the speed, transfer entropy, and scalability of information engines” in addition to improved cloud storage or its alternative.
“Through thermodynamic reversibility — to the extent that it is allowed by a modern understanding of statistical mechanics — we envision a future blockchain that is not only rooted in real-life assets like energy usage but also is a more responsible steward of our natural resources in support of the economy,” Belof noted.
While still in development, E-Stablecoin could eliminate the major problem that plagues many cryptocurrencies — the tendency for the exchange price to succumb to wild fluctuations that exacerbate risks and discourage consumer transactions and long-term smart transactions.