A Blockchain Based Layered Architecture for Consensus Mechanism in Decentralized Energy Trading

Abstract

The utilization of renewable energy sources and the creation of a sustainable energy system can be greatly facilitated through platforms for decentralized energy trading. Multiple levels in the suggested architecture provide effective and safe consensus techniques for trustworthy transaction validation and verification. A blockchain-based framework that uses distributed ledger technology to guarantee transparency, immutability, and data integrity makes up the initial layer of the architecture. The second layer focuses primarily on the consensus process, which mixes evidence of work and evidence of stake algorithms to obtain consensus on transaction legality. The third layer uses a sharing method to increase scalability and efficiency. This mechanism splits the network into smaller, manageable parts known as shards, enabling parallel processing, and lowering the computational cost of consensus algorithms. Smart contracts are integrated at the fourth layer, automating the fulfillment of predetermined conditions and norms in energy transactions. Demand-response programmers and dynamic pricing models are made possible by smart contracts because they do away with middlemen, uphold trust, and simplify complicated energy trading systems. The last layer tackles privacy and data security through the use of privacy-enhancing tools like homomorphic encryption and zero-knowledge proofs. These solutions provide transparency for audits and legal compliance while protecting sensitive data. Decentralized energy trading systems can get around problems with scalability, efficiency, consensus, and privacy by utilizing this layered design. High throughput, low latency, and lower energy usage are all supported by the suggested hybrid consensus method, sharing strategy, integration of smart contracts, and privacy-enhancing technologies together, which promote market innovation and participation in decentralized energy trading.