Security and Privacy in Decentralized Energy Trading Through Multi-Signatures, Blockchain and Anonymous Messaging Streams

TLDR

Smart grids with bi‑directional communication enable advanced consumption monitoring and energy trading, yet security and privacy of consumption and trading data remain major challenges. The study aims to provide transaction security in decentralized smart‑grid energy trading without relying on trusted third parties. A proof‑of‑concept system was built using blockchain, multi‑signatures, and anonymous encrypted messaging streams, allowing peers to negotiate energy prices and execute trades securely, and case studies evaluated its security and performance. The system supports anonymous price negotiation and secure transactions, and the case studies demonstrate that it meets the identified security and privacy requirements while maintaining acceptable performance.

Abstract

Smart grids equipped with bi-directional communication flow are expected to provide more sophisticated consumption monitoring and energy trading. However, the issues related to the security and privacy of consumption and trading data present serious challenges. In this paper we address the problem of providing transaction security in decentralized smart grid energy trading without reliance on trusted third parties. We have implemented a proof-of-concept for decentralized energy trading system using blockchain technology, multi-signatures, and anonymous encrypted messaging streams, enabling peers to anonymously negotiate energy prices and securely perform trading transactions. We conducted case studies to perform security analysis and performance evaluation within the context of the elicited security and privacy requirements.