Interview with Markos Romanos – COO, Pylon Network
Markos was born and raised in Athens, Greece. At the age of 18, he became an “academic nomad” to pursue his studies abroad and get to see “what is out there.” He got hooked on sustainable technologies, and his destiny became clear! He started exploring them, testing them, seeing how they interacted, how they complete (and compete with) each other, and how they could be implemented – as soon as possible.
Today, almost 10 years after, he spends his time validating business models, based on the marriage of blockchain technology and the digitalization of the energy sector. As the COO of Pylon Network, his role is focused on facilitating international cooperations, engaging with energy stakeholders, and working on ways to accelerate innovation in the energy sector.
How was Pylon Network Formed and could you tell us a bit of your relation to Klenergy-tech, and what was the reason that you wanted to separate Pylon from it?
Klenergy was founded 5 years ago, starting its journey as a cleantech startup. Back then we were 4 young, international engineers, who could not understand why sustainable technologies are not being promoted as they should and decided to show to the world that a cleaner, more decentralized development model is possible, not only from an environmental point of view but also from an economic and social point of view.
Our first product, Klenergy HELIOS, was a hydrogen storage unit capable of storing vast amounts of excess electricity from renewable energy sources and deliver, efficiently, electricity and hot water on demand. Klenergy started receiving international recognition, and without realizing, a university competition idea had turned out into a full-time job.
However, trying to commercialize a hardware solution in the energy sector and – essentially – competing with a guy called Elon Musk (!), we were wise enough to strategize and aim for a more lean development.
A few years forward and we are finalizing the operational architecture of Pylon Network, based on our smart energy meter, Klenergy METRON. For the past months, we have been engaging with a community of developers, exchanging ideas on the capabilities of our smart meter and the potential applications of blockchain in creating the digital network for collecting and sharing energy data, by combining unprecedented levels of transparency with the “holy grail” of data privacy and security.
However, the conceptualization proved to be the easiest of all the steps to follow. One of the biggest challenges we faced early on was the distrust of energy stakeholders to the new-born technology. Quickly, we realized that we need to demonstrate, show something that people can see/touch and offer a specific, clear business case, and market value.
At what stage of development is Pylon Network currently at? What are the next steps?
Currently, Pylon Network is in a very exciting period. We find ourselves – a year after the start of the demonstrations with GoiEner – transitioning to the commercialization stage, while preparing the scale-up of our operations (both geography-wise and market-wise).
Looking back to what we achieved during the past year, this was a very successful demonstration from many perspectives:
1) Tech-wise: we developed our code, applied it in the real market, with real energy data from real energy consumers. We proved its scalability (8k users at the moment – all consumers of GoiEner have been integrated and recording their energy consumption on our blockchain database. Our demo is available through our website, while the demo blockchain explorer is also live, showing the architecture of Pylon Network
2) Engagement with consumers: we had the chance to work closely with active energy citizens. Through that interaction, we had the opportunity to engage with them, understand their needs, and establish a very valuable feedback loop for the design process of our products and services. At the same time, we were able to amplify our message and vision for our energy future, reaching the growing part of the Spanish and EU population that are joining energy cooperatives or investing in energy generation assets at a community level.
3) Identify and validate: the short-term commercial viability of our service and the value that Pylon Network can offer to the energy sector, RIGHT NOW – not in 5 years FROM NOW.
Carrying these very valuable lessons in our luggage, we are now moving towards the commercialization stage, and all our energy is focused on that. This means that during the next months, we will see Pylon Network reaching out to more businesses, stepping up the marketing efforts for reaching more potential users and increasing the engagement with our community. Our soon-to-be-released roadmap will reflect this outlook, broken down in the targets we are setting for 2019.
With many companies closing because of the current adverse market situation, how does Pylon Network plan to make it through?
With the experience of being a startup, we always knew that the number one reason for failing projects is running out of funds. In the startup lingo, it is called the valley of death (the period from the launch of a project until you break even) and we were lucky enough to have mentors, who knew that and were able to plant it in our newly-developed entrepreneurial mind.
From the moment we decided to run an ICO, we only focused on the implementation of the technology in the real market and on creating value for the energy sector. We consciously decided to stay away from all the hype and “to the moon” rhetoric, and focus on expanding our work to something that could potentially be a game-changer (but still had many challenges to overcome). From a retrospective, the fact that we raised the minimum amount of money needed to demonstrate our technology helped us to stay down to Earth and not get carried away in the crypto-frenziness.
This decision paid off – because we gained valuable time into validating the market and hearing the needs of various stakeholders that we interacted – at an international level.
Almost a year after (today), we are about to enter the commercialization stage of the project, knowing what is the first service we will offer (i.e., having validated the value for a specific group of energy stakeholders). This might sound like common logic, but unfortunately, this is something that blockchain projects have been stigmatized by: the business maturity of many projects has created the image that blockchain is a technology trying hard to find an applicable solution (rather than the other way around) – and this is not true. However, you need to spend time to demonstrate it, explain the technology, and educate people about the true possibilities and also, the real challenges of implementing it in any sector. And when we are talking about one of the most risk-averse and conservative areas in our economies, then the difficulty of such efforts multiply.
So, what I am trying to say is that we are delighted with the focus and the work we have put together in regards to technology development, but also to market validation. This is what allowed us to be at a point where we have developed and demonstrated the relevance of our technology for the energy sector. The capabilities of our technology (being more advanced on that respect, compared to other projects that raised tens of millions of dollars through their ICOs) and what allowed us to not only depend on the performance of the crypto market for ensuring the financial sustainability of the project.
What Geographical areas does Pylon Network operate in? Where are the areas you want to expand?
EU is a safe bet for us in the sense that the homogenized market conditions among the EU member states, offers us a potential for more efficient replication of the model we are demonstrating in Spain and the expansion of our commercial activities to other EU markets.
However, the UK is still an attractive market for us and offers some market conditions which we see fit to our development strategy. For example, UK has one of the mature market conditions for the operation of aggregators (a very important market player for the energy transition), who have a critical need for accessing accurate distributed data to coordinate multi-agent operations.
At the same time, as in so many energy markets at the moment, we see a strong trend of energy community movement in the UK. And the way we see it, this movement will not be affected by any populist agenda or anyone who is trying to devalue scientific evidence – on the contrary, it might accelerate it.
So, in few words: since we are based in Spain and we are demonstrating our technology with Spanish and EU stakeholders, the EU is a “smarter” and more accessible market for us – especially for its initial implementation stage. However, we always keep in mind that we are dealing with a global problem – it’s hard to forget! – and we are always keeping our eyes and ears open for markets that offer a favorable operational environment and regulatory landscape.
I read that you were initially planning to have a two-token model. What was it that made you change it?
We still have a two-token model (one token and one coin to be accurate) and we recently published our Token Paper, which explains their utility, their dynamics and their relationship in more detail. In a few words, we have created Pyloncoin (PYLNC) which is used as a method of certifying high specifications energy data and their settlement within the neutral database of Pylon Network. PYLNC can also be used for the payment of the exchanged services themselves (optional). It should also be noted, that PYLNC has a pre-determined set of rules regarding the increase in the total supply of PYLNC, as well as the distribution of the newly “mined” PYLNC, over the next 16 years.
In parallel, there is Pylon Token (PYLNT), which is a digital asset that represents a share of participation in the Pylon Network platform and with it come the rights associated with the distributed benefits (rewards) in the form of PYLNC.
As mentioned, all details can be found in the Token Paper and anyone interested is encouraged to join our Telegram chat group, where you can talk directly to members of the team and interact with our mighty community (official English and Spanish groups – unofficial Portuguese and Balkan groups)
What is your view on volatility and unstable markets/token price? How does this affect/discourage customers/businesses from adopting?
You hit a bulls-eye with this question! The volatility and speculation surrounding crypto-currencies were many times the reason for many raised eyebrows during presentations of Pylon Network in front of energy stakeholders, and this is understandable since no-one wants to expose their energy supply (such a basic and important asset) to speculation and potential risk.
Our strategy – not only to overcome this skepticism but also to not undermine the adoption potential for Pylon Network – was to not impose the exclusive use of crypto-currencies within the platform. What we did instead, was to allow for FIAT gateways and more traditional payment options – which mainstream business and consumers are more familiar with – while offering the crypto-currency, as a parallel option
What is Pylon Network’s advantage over the current market providers?
The root problem that we have identified as a barrier to a successful energy transition is the (lack of) cooperation among the numerous stakeholders that interact throughout the energy value chain.
The need for cooperation becomes more pressing than ever due to the increased number of distributed energy resources (DER) and other assets being connected to the grid, leading to an exponential increase of the number of actors that need to coordinate for maintaining the operation of the grid (avoid black-outs) and for avoiding the cost of electricity to skyrocket.
At the same time, the energy sector is about to be taken by a wave of digitalization. In the EU alone, by 2020 there will be 100s of millions of smart meters, installed in consumers home, generating a new stream of granular data (at the consumers level) for the first time in the energy sector. Digitalization of the sector can offer numerous advantages which can be summarized by the saying, information is power. And the problem is that currently this power is concetrated to a handful of centralized entities (public and/or private), who own the physical infrastructure and are responsible to manage and maintain the energy data collected from this infrastructure (meters).
For ensuring that these data will be leveraged for the optimal value (economic, social & environmental), Pylon Network creates an open, neutral, shared energy database for encouraging the exchange of digital services among all stakeholders. They say that data is the oil of the 4th industrial revolution and we totally agree. However, in order to create the optimal social value, instigate innovation in the energy sector and prevent the slow-burning catastrophic consequences of climate change, these data need to be open and neutral in nature (i.e. create “agnostic” frameworks for sharing data in a way that is transparent but at the same time respects – and seriously takes into account – data privacy regulations and ethics).
Pylon Network guarantees the highest standards of data neutrality by leveraging our open source blockchain technology, which is designed in accordance to the high requirements of the energy sector (meaning that it also deals with the challenges of scalability and energy consumption, commonly faced by blockchain protocols). In this way, Pylon Network uniquely combines full transparency with full privacy for open energy data and unlocks a blue ocean of innovation around digital energy services.
What legal problems have you run into – have they prevented growth to certain markets?
First of all, let me highlight that in our case we are not only dealing with the financial regulation regarding crypto-currencies, but also with the energy sector’s regulation. Hence, we are following very closely all developments in that aspect (especially within the EU context, which is also our market focus in the short- / medium-term.
However, I would say that we have run into legal uncertainty, rather than legal problems. As a general phenomenon that we observe more and more often in our days, the technology caught legislation off-guard and opened a blue ocean of unregulated space (which comes with many ambitious and innovative ideas, but also with many risks).
EU is moving into creating a framework for a more systemic approach and definition of blockchain applications in a number of sectors and initiatives like that are definitely welcomed since they offer more credibility and security in this new field (both for investors and for startups, like us). However, as they say, the devil is in the details and we will have to wait and see how these regulations shape and whether they are placed in a way that will truly capitalize on the potential that the technology has to offer – we will have to wait and see.
What are you personally looking forward to the most in the year 2019 for Pylon Network?
Personally, I am looking forward to hitting a very big milestone for the project, which I have been anticipating for a long time: its commercial adoption. Pylon Network’s MainNet will be launched later this year (after our Beta Program, which will be announced by the end of this month). The launch of MainNet signifies the official initiation of our commercial activities. At the same time, we will be able to show more aspects of our technology and its surrounding infrastructure to the energy world – things that people can see and even, touch.
This year will be a year of growth for Pylon Network – from many aspects. Scaling up in terms of many aspects: platform utilization, market presence, market share, engagement with energy stakeholders, applications within the energy value chain.