Scientists in California have unveiled a theory to create a completely decentralized Electricity Stablecoin (E-Stablecoin), which will be tied to an unusual physical asset — electricity.
Scientists Maxwell Murialdo and Jonathan L. Belof from the Lawrence Livermore National Laboratory in California published a joint research paper in the online scientific journal Cryptoeconomic Systems, using statistical mechanics and information theory to create a new class of stable coins that would be able to transfer energy as a form of information. The scientists named the innovative asset Electricity Stablecoin (E-Stablecoin).
The researchers claim that their innovation will allow electricity to be transmitted without physical wires or a network and will make it possible to create a fully decentralized stablecoin secured by the internal utility of the physical asset attached to it — electricity.
Murialdo and Belof emphasize that the described E-Stablecoin concept is not realized and requires technical progress and innovation in cloud storage. The main point of their work is reduced to a theoretical proof of concept.
The main features of the innovative E-Stablecoin, according to the researchers:
- A new class of stable coins will transmit energy as a form of information, eliminating conventional power lines.
- The price of E-Stablecoin tokens will be tied to the cost of kWh of electricity.
- Any user will be able to mint the E-Stablecoin token in total per kWh of energy or exchange stablecoins for electricity.
- The system will be fully automated and controlled by smart contracts.
The scientists stress that electricity was chosen to provide E-Stablecoin coins not at all by chance but because of its advantages among physical assets, including:
- Electricity is a fungible asset, making it easy to decentralize.
- Electricity is in wide demand, primarily since it is used in computing processes.
- Electricity has had a relatively stable value for decades.
Murialdo and Belof highlight that E-Stablecoin will not be constrained by the same structures as BTC. Specifically, the researchers argue that, unlike BTC, the number of existing E-Stablecoin tokens will not be fixed, but can increase or decrease as needed. This will eliminate the use of E-Stablecoin as a speculative asset. The scientists point out that this feature is not a bug or flaw at all, but an important distinguishing feature. The technology will be really useful, as it can be used to stabilize power grids and provide electricity to hard-to-reach areas.
According to analysts of Bank of America, stablecoins are part of the inevitable evolution of modern e-currencies.
