Cetin Ogut

Geopolitics has become the key challenge in access to energy supplies globally. According to the BP Statistical Review of World Energy, much of the world’s oil and gas reserves are located in certain parts of the world: the Middle East, North Africa, the Caucasus, and the Commonwealth of Independent States (CIS) account for nearly 80 percent. If we look at countries in specific detail, six countries produce half of the world’s oil, and three countries produce half of the world’s gas.

On the other hand, the countries that consume these reserves are much more diversified. The supply of energy is critical for OECD countries in Europe and the Pacific region. The trading of energy supplies has become much greater in terms of volume and more global in its scope. The world’s geopolitical situation has brought out a greater need for interdependence and cooperation between producer countries and consumer countries. As we all know from current events, accidents, military conflicts, and terrorist attacks cause problems for the supply and transport of hydrocarbons, especially in critical transit points. Thus, energy security has become an important priority for many countries, since it is seen as vital for economies.

Turkey’s demand for energy is increasing in line with its economic growth. Her fundamental need is to secure reliable energy to fuel its economic development But, as a result of its geopolitical environment, the country faces many important challenges and opportunities.

Digital transformation is not just about modernizing technology and tools. It is about adopting appropriate digital technologies to change how we work, deliver public value, and build prosperity through the emerging digital economy. Blockchain, also known as a distributed ledger technology, stores different transactions/operations in a chain of blocks in a distributed manner without needing a trusted third-party. Blockchain is proven to be immutable, which helps with integrity and accountability, and, to some extent, confidentiality through a pair of public and private keys. Blockchain has been in the spotlight after successful boom of the Bitcoin.

Blockchain functions as a shared digital ledger running on multiple computers in a public or private network. Blockchain software aggregates transaction records into batches or “blocks” of data, links and time-stamps the blocks into chains that no one can change or delete without the consent of a majority of participants; instead, shared governance protocols verify and record data automatically. As a result, blockchain provides an immutable, transparent record of transactions. Some researchers call it the Internet of value because we can use it to store, manage, and exchange anything of value—money, securities, intellectual property, deeds and contracts, music, votes, and our personal data—in a secure, private, and peer-to-peer (P2P) manner. We achieve trust not necessarily through intermediaries like banks, stock exchanges, or credit card companies but through cryptography, mass collaboration, and some clever code.

Use cases tend to focus on financial services. Government agencies could also use blockchain not just for conducting financial transactions and collecting taxes, but also for registering voters, identifying recipients of healthcare, financial support, and emergency aid; issuing passports and visas; registering patents and trademarks; recording marriage, birth, and death certificates; and maintaining the integrity of government records. Blockchain offers good solution for many applications that need transparency, decentralization, integrity, immutability, and security without requiring trusted third party. However, there are several challenges to be addressed to realize the full potential of blockchain for different applications and use cases. Typical challenges to be addressed include the following. • Throughput and bandwidth in the blockchain network: Is existing network bandwidth enough for blockchain transactions and updates to do real-time updates in the systems? We need to more research to address this challenge. • Latency/delay in blockchain network: How often the ledger should be updated in the blockchain and what is the least tolerable updating delay that is acceptable? Furthermore, adversary can disallow a miner’s block from reaching all other miners for a long time. How can we address these types of attacks more effectively? • Energy consumption in blockchain: What could be the minimum/optimal energy consumption for such computationally complex operations in blockchain?

In many ways, Blockchain today is comparable to where the Internet was in early 1990s. While we have witnessed how the ‘Internet of Information’ has changed our societies over the past two decades, we are now entering a phase where Blockchain is likely to do the same by ushering ina new paradigmcomprising ‘Internet of Trust’ and ‘Internet of Value’. It is expected to disrupt the way stakeholders would interact in a decentralized framework of trust, thereby increasingly democratizing value. Banks and financial services institutions play a very important role in those wider societal interactions today and Blockchain is therefore forcing them to rethink their roles to stay relevant in this emerging paradigm. It's early days, but industry leadersare sponsoring a wide range of blockchain use cases supported by industry consortiums. Having seen the potential of this technology and the challenges, we think the opportunity is clear but the blue sky is too far off and companies need to validate use cases and business / technical viability before implementing blockchain.

To be detailed.