Decentralized energy trading in smart grid using secured post quantum encryption

Abstract

With the shifting from traditional grids to smart grids, there is an immense shift towards decentralized energy trading wherein “prosumers” can enter peer-to-peer transactions. This model decreases dependence on centralized utilities and maximizes efficient, flexible, and resilient energy distribution. It enhances transparency and trust by automating and securing trades via smart contracts. No intermediaries are required; hence transaction costs are low. However, an attack that would breach the security guarantees of blockchain systems-by tremendous quantum computers-might break a few of the older cryptographic methods or even reveal very significant portions of their keys. This paper introduces a blockchain-based decentralized framework for energy trading in smart grids, with a strong emphasis on post-quantum cryptography to safeguard transactions against quantum threats. We explore post-quantum cryptographic techniques, particularly lattice-based algorithms due to its compact signature sizes and strong security capability for the future-proof blockchain enabled smart grids. The proposed system model ensures secure and decentralized energy trading while incorporating off-chain signature validation to enhance computational efficiency. Unlike previous studies that primarily focus on market structure or consensus protocols, this work introduces a quantum-resilient architecture with an off-chain transaction validation mechanism, enabling high-throughput trading secured against future cryptographic vulnerabilities. The novel feature of the proposed model is the integration of off-chain post-quantum cryptographic verification into a blockchain energy trading architecture that is practically deployable on embedded hardware. Compared to existing solutions, the proposed method ensures quantum-resilient authentication while reducing gas costs by 40% and improving computational efficiency achieving a signing time of 0.327 ms and verification time of 0.127 ms. The proposed framework represents a significant step toward future-proofing blockchain-enabled smart grids while maintaining performance, transparency, and resilience. The outcome of this research work presents a quantum-safe solution that strengthens the resilience of smart grid operations and ensures the security of decentralized energy trading.