Blockchain-based Energy Trading System

Abstract

The traditional energy market suffers from inefficiencies, high transaction costs, and a lack of transparency, often limiting small-scale producers from participating effectively. Blockchain technology offers a decentralized, secure, and transparent solution for peer-to-peer (P2P) energy trading. This paper presents a blockchain-based energy trading platform utilizing smart contracts for automated transactions and ensuring real-time energy tracking. The proposed system enhances trust, eliminates intermediaries, and promotes sustainable energy practices by encouraging participation from small-scale renewable energy producers. Future advancements include AI-driven predictive analytics and integration with IoT devices for optimized energy management.

Introduction

The energy sector is shifting towards decentralized technologies to improve efficiency, transparency, and accessibility. Traditional centralized energy trading systems involve intermediaries that increase costs and complexity, limiting small-scale renewable energy participation. Blockchain technology offers a decentralized, secure, and transparent solution by enabling peer-to-peer (P2P) energy trading through smart contracts that automate transactions and pricing.

The paper proposes a blockchain-based energy trading system built on Ethereum, featuring a decentralized marketplace where producers sell surplus energy directly to consumers. It discusses system design—including user registration, wallet integration (MetaMask), energy listing, smart contract execution, and transaction tracking—supported by a React-based user interface and backend technologies like MongoDB and Chainlink oracles.

Challenges addressed include scalability, regulatory uncertainty, infrastructure costs, security risks, and financial viability. Solutions involve blockchain scalability improvements (e.g., layer-2 solutions), regulatory adaptations, and secure system design. Testing strategies focus on ensuring software quality, correctness, and reliability.

Conclusion

The system aims to facilitate efficient, transparent, and secure energy trading, accelerating the adoption of sustainable energy models.

References

[1] \"Blockchain-Based Energy Trading\" by Kodali and Yerroju (2018): This paper discusses the application of blockchain technology in energy trading, highlighting its potential to enhance transparency and security. semanticscholar.org [2] \"Energy Trading Systems on Blockchain Networks\" by Matthew T. (2003): This article explores the integration of blockchain networks in energy trading systems, focusing on the benefits and challenges of such implementations. engineegroup.us [3] \"Application of Blockchain Technology in Energy Trading: A Review\" by Zhang et al. (2021): This systematic literature review examines various studies and projects related to blockchain-based energy trading, providing insights into current developments and future directions. frontiersin.org [4] \"A Blockchain-Based Energy Trading Platform for Smart Homes in a Smart Grid Environment\" by authors (2018): This research proposes a renewable energy trading platform using Ethereum\'s smart contracts to ensure secure and automated energy trading without third-party intermediaries. ieeexplore.ieee.org [5] \"Implementation of Blockchain-Based Energy Trading System\" by authors (2018): This study investigates the application of blockchain technology to power trading, aiming to address complexities and risks associated with centralized trading systems. researchgate.net [6] \"Blockchain-Based Power Energy Trading Management\" by authors (2019): This paper discusses the use of blockchain to record transactions and reach consensus in energy trading, with payment clearing executed via smart contracts. dl.acm.org [7] \"A Blockchain-Based Lightweight Peer-to-Peer Energy Trading Framework\" by Khorasany et al. (2020): This work proposes a lightweight blockchain framework for location-aware peer-to-peer energy trading, addressing challenges in decentralized energy markets. arxiv.org [8] \"An Architecture for Distributed Energy Trading in Byzantine-Based Blockchain\" by Guo et al. (2020): This research presents an architecture for distributed energy trading using a Byzantine-based blockchain, focusing on security and efficiency in energy transactions.

Copyright

Copyright © 2025 Prof. T P Manasa , Swarnim Srijan, Sara Shree, Yashvardhan Srivastava, Shivam Singh Saini. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.