What is Power Ledger? In this Power Ledger review, we’ll be discussing how the project could represent the first step in a plan to revolutionise the energy industry forever.
With the growing popularity of renewable energy, more and more people are left with excess energy which they wish to resell. Selling it ‘back to the grid’ offers terrible prices due to the monopoly held by energy companies.
Power Ledger will double the price you receive through the introduction of a peer-to-peer network.
YOU WILL LEARN:
How Will Powerledger Revolutionise The Energy Industry?
How Are Powerledger Better Than The Alternatives?
Is The Token Price Linked To The Success Of The Platform?
Is Powerledger A Good Investment?
- What Is Powerledger?
- How Does Powerledger Work?
- What Problems Are They Solving?
- Will Powerledger Token Prices Increase?
- The Team
- Since The ICO
- Extra Points
- Follow Future Posts
1. WHAT IS POWERLEDGER?
Power Ledger is an Australian based peer-to-peer energy trading platform which integrates with the existing electricity system.
As a platform, it supports a number of different applications including: Peer-to-Peer (P2P) Trading, Wholesale Market Settlement, Electric Vehicles and Carbon Trading.
These applications are not just conceptual; they are proven and already deployed in certain communities and energy markets around the world.
2. HOW DOES POWERLEDGER WORK?
To explain how Powerledger works, it’s first necessary to understand the two types of tokens related to Powerledger:
- POWR Tokens (For sale on exchanges)
- Sparkz (Only used within the platform)
POWR tokens are ‘access tokens’. In other words, they allow users access to the platform – and thus, without them, you cannot use Powerledger.
Once purchased, users can convert them to Sparkz via a smart holding contract and then they can use their Sparkz on the platform.
Sparkz are the tokens used within the platform. They cannot be bought externally on exchanges and they can only be gained by converting POWR tokens.
The value of Sparkz depends on the cost of local energy. These tokens can always be sold in return for your local currency.
To gain a greater understanding of how Powerledger works, let’s now look at the process from two perspectives:
- Energy Sellers
- Energy Buyers
An energy seller is someone who produces more electricity than they consume which – common in locations such as Australia due to the vast amounts of sun and high prevalence of solar panels – and thus wish to sell their excess energy
- Sell your excess power to energy buyers in return for Sparkz on the app/website
- Convert your Sparkz to your local fiat currency via app/website e.g. USD, AUD etc.
That’s it. You’ve just sold your energy to other app users and for a much better price than you would have been offered compared to selling it back to the grid.
- Buy POWR tokens from exchanges in order to access the platform
- Convert your POWR tokens to Sparkz
- Use your Sparkz to buy excess energy off people for great prices
- Use the energy you bought and you can even re-sell the excess that you don’t use
3. WHAT PROBLEMS ARE POWERLEDGER SOLVING?
Peer-to-Peer (P2P) Trading:
The issue with the current system arises due to the stranglehold that the energy corporations have over the market.
Due to the oligopolistic nature (several key players with no outside competition) of the industry, these companies can offer consumers virtually whatever price they want because consumers have little alternative in choice.
We’ll give a higher level of detail below to explain further how the current system works in Australia and how Power Ledger are significantly improving upon it.
The Current System
Excess energy can currently be sold back to the grid, through the local utility company, for 7c/kwh. The utility company then sells this on at a much higher price.
Power Ledger’s System
Power Ledger will be doubling this payout from 7c/kwH to 15 c/kwH for energy sellers, producing a clear incentive for them to make the switch to selling via Power Ledger instead of the regular system of selling back to the grid.
How Can Power Ledger Offer Such Good Prices?
Power Ledger will be hosted on the Ethereum network which means they can make use of smart contracts to cut out the middleman and reduce costs to a fraction when compared with the energy companies.
On top of this, Power Ledger are not even offering ridiculously good prices based on a fair market valuation – the current system is underpaying consumers and Power Ledger are bringing in a more fair price in terms of general open market standards.
5c/kwH will go towards paying for the usage and maintenance of the power lines plus a small cut from this will be paid to the Power Ledger team.
4. WILL THE TOKEN PRICE INCREASE IN VALUE?
This is another incredibly important point that many people overlook when investing in Cryptocurrencies.
When you invest in a company, you are buying shares. As the company makes profits, the shares increase in value. In other words, you are investing in the value of the company rising.
With the majority of Cryptocurrencies, the coins/tokens don’t represent shares. Therefore, the company can increase in value (i.e the CEO and employees get rich) and yet the coin/token may actually fall in value.
The ONLY factor determining token price is supply and demand on exchanges.
Obviously, supply and demand are affected by many factors but the price all comes down to the combination of these two. Because of this, it is essential to ask yourself the following question:
Will there be token demand on the exchanges?
If the answer is no, token price will fall. If the answer is yes, the token price COULD rise. This idea is the most important element of any investment and yet so misunderstood with Cryptos.
I’ve written a short article explaining how important it is to understand this. You can check it out here.
So, let’s look at the demand.
What Are The Sources of Demand?
In order for consumers to buy power from the Power Ledger platform, they will first have to go to exchanges and buy POWR tokens. Otherwise, they cannot use the platform.
Therefore, as more people wish to use Power Ledger, there should be a greater demand on exchanges for the tokens, thus driving prices higher.
As a result, Power Ledger have very effectively linked their token price to the usage of the platform.
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5. THE POWERLEDGER TEAM
As our regular readers will know, one of our mantras here at Crypto Gurus is to “invest in people, not ideas”; you could have the greatest idea in the world but without proper execution, it will not matter.
An Impressive Team
With three names jumping out as being particularly strong after a little digging: Dr. Jemma Green, John Bulich and Dr. Gov Van Ek. Dr Green spent over ten years working in investment banking in London, while at the same time completing a Masters degree and two postgraduate diplomas at Cambridge University.
She is also a research fellow at Curtin University Sustainability Policy (CUSP). The other two are the founders of Ledger Assets, a venture that has successfully created and commercialized a number of blockchain systems and applications including Uproov.com.
The team seem to have a good mixture of experiences and knowledge bases, all of which seem suited to what they are trying to achieve.
A Strong Advising Team
As well as this, lead Board Advisor Bill Tai has been a highly successful venture capitalist for a long time, Richard Branson hosted the team at the 2017.
Necker Island Blockchain Summit and Elon Musk has even reached out to Dr Green for more information on the project.
We feel this the correct time to mention how impressed we are by the sheer abundance of information provided by Power Ledger.
Not only do they provide the obligatory Whitepaper, there is also a detailed slide presentation helping to outline the way the system works (which was presented at the Necker Island Summit) and an extensive token paper among other things.
To us, this shows a team that have not only done their homework but are also determined to successfully bring this project to market.
6. THE POWERLEDGER ROADMAP
- Application Development: The first applications to be in beta testing after the token sale will be the Microgrid/Embedded Network Operator/Strata and the Electric Vehicle Trading Applications.
- Green Energy Loyalty Rewards Program: The green energy incentive formula weighted towards renewable producers will begin and accelerate renewable energy generation.
- Begin Distribution of Growth Pool: Early Application Hosts will be gifted POWR tokens to incentivize their use of and contribution to the platform.
- Technology Layers Transition: Power Ledger will complete the transition to a modified fee-less Consortium Ethereum network.
- First Asset Germination Event: Power Ledger and Platform Application Hosts will begin conducting Asset Germination Events, where POWR token holders will receive priority to become co-owners and beneficiaries of renewable assets.
- Marketing and Partnerships: As new applications are developed potential Application Hosts will be targeted and/or Power Ledger may directly deploy the application.
- Beta Test of New Applications: Begin beta test of Autonomous Asset Management and Neo-Retailer and Carbon Trading Applications.
- Frequent Asset Germination Events: Asset Germination Events will be frequently conducted by Power Ledger and its Application Hosts, driving the intrinsic value of the token.
- Transition to Public Blockchain: Power Ledger aims to be operating fully on a public PoS blockchain.
- PowerPort and Future Applications: Begin beta testing of the PowerPort Application, as well as Wholesale Market Settlement, Distributed Market Management, and other future applications that cannot even be imagined yet!
7. SINCE THE ICO
With an ICO price of $0.088 per token, the Power Ledger token has trebled in value since trebled in value.
There was significant hype around the project during the ICO which has continued ever since and this provides positive indications for the short-term prospects of Power Ledger also.
8. EXTRA POINTS TO CONSIDER
Growing Marketplace (Positive)
With the amount of research and funding into renewable energy resources growing rapidly, we are sure to see technological advancements increase the efficiency of the renewable sector.
This should lead to an increased quantity of energy production from regular people and thus an expanding marketplace for Power Ledger to grow into
Consistent Energy Supply (Negative)
A side note we’d like to include is one that is relatively obvious when talking about Solar Power, but needs mentioning – the varying levels of energy production that could be achieved across the globe.
A household in Australia would produce a much greater quantity of surplus energy, than houses in cooler climates which could hamper development in certain locations.
9. THE CRYPTOGURUS CONCLUSION
Currently, market prices are driven by speculation rather than usage – look at IOTA, for example, it’s used by virtually nobody and yet is valued at over $1 billion. This is entirely based on the potential it holds for the future – not its current usage.
With Power Ledger, it’s fair to say that the potential is huge. Because of this, we expect to see prices rising in the short term based on speculation alone.
In the long term, the team, technology and practical use cases are all there; this cannot be said for most ICO’s.
The number of successful trials as well as the committed partnerships only supports this stance and the fact that both Richard Branson and Elon Musk seem to see something in the project would be more than enough for most casual investors.
It certainly seems to favour long-term, organic growth; the nature of token as discussed means that as Power Ledger are able to draw more hosts on board, the value should only increase.
However, it’s very important not to overlook the many risks involved with this project – it would be naive to expect the energy companies not to attempt to disrupt Power Ledger in some way.
With their deep pockets, we wouldn’t be surprised for a smear campaign to be produced about Power Ledger in order to protect their own businesses.
Furthermore, the difficulty of achieving their goal is immense. Is it realistic? It’s a huge ask for certain.
As investors, we are always looking at the risk vs reward when considering any investment. In the case of Power Ledger, we believe that the reward does justify the risk so we would consider adding this to our portfolio.
However, due to the large risks involved, we would only consider a relatively small allocation towards this project (5% or less) for our own portfolios. This is, in no way, a recommendation for anyone else!
That’s the end of the article! Thanks for stopping by and don’t forget to check out our other articles for regular Crypto/ICO reviews and market updates.
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This article has been provided by our content creator; Aaron Laver.