- Units (or lot sized) in energy and commodity trading are standardized and defined according to size, quality, and quantity. In the current market, these criteria are needed to overcome transaction costs.
- Actors that can't offer their goods to match the standardized criteria are not able to sell in wholesale power markets.
- Actors who can't sell are forced to use third-party intermediaries, such as brokers or banks, to draft specific trade contracts.
Blockchain can disrupt the traditional model, as it can reduce transaction costs by creating a more connected market of smaller actors through standardization of data sharing via smart contracts and the automatic execution of trade orders.
This concept helps ...
