Optimizing public utilities with IoT and blockchain technologies

5 min readApr 25, 2018
Smart meters continuously stream data back to the utility company.

The recordkeeping involved in preparing and distributing utility bills to consumers each month involves highly manual and time-consuming tasks performed by a sizeable staff. If there is a mistake or failure along the way, additional resources must be allocated to resolve the problem. Public utilities record and payment cycles are prime systems to benefit from new digital technologies. Two such technologies have emerged recently that may completely change how energy usage data is collected, processed and billed, automating procedures and improving efficiencies across the board: Internet of Things (IoT) devices combined with blockchain technology.

Smart meters and IoT

Many cities are beginning to replace traditional energy meters with smart meters that automatically send energy usage data to a utility company’s data center in the cloud. Smart meters are IoT wizards for the public utility sector. These meters are web-connected devices that can easily replace traditional units. Smart meters eliminate the need for meter readers to walk from meter to meter manually collecting and recording usage data. Instead, this staff can be used for more strategic initiatives and problem-solving tasks.

Blockchain and smart contracts

Blockchain technology at its core is simply a digital, distributed ledger. The qualities that make it exceptional and innovative are its transparency, decentralized nature, and multiple points of security. Duplicates of the ledger exist across a distributed network of computers with additional layers of encryption, making it impermeable to hacking. If one copy of the ledger is compromised, it is easily and quickly identified.

Additionally, with blockchain technology, developers can add smart contract features to automatically execute transactions based on the digital ledger. Smart contracts are mutually accepted agreements that specify for transactions to execute when certain conditions of the ledger are met. For example, in the public utility sector, invoices can be automatically authorized to be sent at a pre-defined time.

Advantages of combining blockchain and IoT

IoT and blockchain technologies can work collaboratively to transform public utility districts and automate much of the manual and time-consuming work involved in record keeping and financial transactions. Advantages include:


There is an entire cycle of automation that is possible by utilizing IoT and blockchain. The smart meters automate the collection of energy usage data. Blockchain technology can then automate how the data is recorded. The smart contracts associated with the blockchain can be set to automatically create and distribute monthly invoices to consumers. Once customers pay their bill, blockchain can then be used to record the financial transaction.


Because of the IoT data streaming from the smart meters, consumers have insight into their real-time energy usage data. This transparency can also help quickly resolve any questions or issues about billing. Because the data is clear and accessible, decisions become data-driven. Also, because public utilities are a highly regulated industry, the IoT data and the digital ledger together provide a completely transparent record of transactions for auditors and regulators.

Increased velocity

The speed which energy usage data streams to the cloud from a smart meter increases the speed of collection, the quantity, and depth of data, compared manual record collecting. IoT data is typically high-volume, big data, which can lead to the need for robust data storage solutions. Blockchain solves that problem. Because, blockchain ledgers are decentralized and distributed across a wide network, IoT data can be safely stored within the network. This frees up cloud data storage space for other company data and eliminates bottlenecks that may occur due to too much IoT data flooding the cloud data storage center.


IoT allows the automatic transfer of data, but because the data is constantly streaming from a multitude of devices, IoT data and devices are also prone to security breaches. IoT data security can be tightened by adding layers of network security, device authentication and certificates, and data encryption, but blockchain provides an additional, and perhaps more effective, layer of protection. The distributed and duplicated design of blockchain technology ensures the integrity of the data. Any attack on a block within the chain would be obvious due to the transparency and consistency of the overall system. Problems can be identified quickly and resolved.

There is an immense potential for IoT and blockchain to transform and optimize the records and transactions of public utility districts. As smart meters begin to replace traditional meters, now is the time for utility companies to consider how to best leverage these new technologies to automate systems and streamline workflows.

IoT analytics

Once an automated system is implemented, moving data from IoT smart meters into blockchain ledgers and then executing billing through smart contracts, utility districts can begin to seek other ways to leverage IoT data. IoT analytics is the next step. IoT analytics unlocks the value of IoT data by converting the high-volume of data into actionable business insights. For public utility districts IoT analytics can be used for:


Real-time energy usage can be tracked by both the utility district and the consumer. Utility companies can also combine real-time data with legacy data to create powerful visualizations of consumption trends over time.


IoT analytic tools can use energy usage trends to detect system irregularities. The system can also immediately detect outages, leakages, meter defects, tampering or theft. The ability to discover and fix problems immediately will improve energy conservation and reduce lost revenue.


IoT analytics can use IoT data combined with machine learning algorithms to forecast everything from spikes in energy usage to future outages. Being armed with this predictive analysis information, public utility districts can take preemptive actions to avoid events that will cause inefficiencies.

A recommended approach is to partner with a consultant with expertise in both IoT and blockchain technologies who can plan and implement the best solution for your business. It is important to consider how these new technologies will integrate with and affect current IT frameworks and what types of customizations may be needed to achieve an optimized system. With the right IT system in place that takes advantage of IoT and blockchain technologies, public utilities can expect a drastic improvement in the efficiency of recordkeeping and financial transactions and a noticeable ROI of transforming these tasks to a digital, automated system. By adding IoT data analytics to the mix, public utility districts can begin optimizing workflow and making data-driven business decisions.

Public utilities are on the brink of a digital transformation, and IoT data and devices, IoT analytics, and blockchain technologies are poised to deliver the most impactful improvements.

Originally published at logic2020.com.




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