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In this what paper, it's mentioned that one of the reasons to use blockchain technology for the energy trading is:

Provide 3rd party liquidity.

What does "third party liquidity" mean in blockchain technology ?

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In a rough sense, liquidity is the ability to convert your assets into hard cash.

In the blockchain world, liquidity refers to people willing to pay fiat so they can acquire a token.

In the energy world, there is a market for people who want to offset their carbon footprint by investing in clean energy. When Company A wants to reduce their carbon footprint but they're already using non-green energy, they can give money to a green energy Company B which will supply that energy to Company B's local grid. Company A is still using non-green energy (they can't up and destroy their local power plant), but by increasing the global supply of green energy, they're off-setting their carbon footprint by reducing the footprint elsewhere.

Based on a quick reading of this *white paper, their goal is to make a green energy token so that people can easily buy that energy without needing to set up specific deals with companies.

This project is trying to help Company B make their green energy "liquid" by converting it into a currency which Company A can easily buy without having to make a specific deal with Company B.

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  • Thank you, So here third party liquidity is company A, I'm right ? Thanks
    – Questioner
    Aug 22, 2018 at 21:28
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    Exactly, Company A is the third party creating liquidity for Company B -- all enabled, theoretically, by WePower's token.
    – ohsully
    Aug 22, 2018 at 23:05
  • Thank you, and what is the advantage for company A to reduce their carbon footprint? (economically) Thanks
    – Questioner
    Aug 23, 2018 at 8:36
  • and just this your sentence: "they can give money to a green energy company B which will supply that energy to company B's local grid." It must not be "A's local grid" ? Thanks
    – Questioner
    Aug 23, 2018 at 8:47
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    The economic advantage is indirect. Companies get good PR by investing in clean energy, that leads to better business opportunities. Some nations fine companies whose carbon footprints are too large, this offset can let the company avoid those fines.
    – ohsully
    Aug 23, 2018 at 17:32

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