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SENTO SOLUTIONS

Smart Energy Token project

Non-technical

WHITEPAPER

Version 0.5

Andro Bunić, Jakov Bajić, Petar Fruk, Moreno Pavličić

HULT 2018. – Harnessing the Power of Energy

February 2018.
National pitch inspiration abstract
Welcome to the future. We are Andro, Jakov, Moreno, Petar and we form hive mind behind
SENTO Solutions team. For the sake of clarity of this project and our social responsibility we
are divided based on our strengths. Moreno is our Marketing specialist, always on the move,
seeking opportunities to promote great ideas and values. For Jakov, our team Analysis
specialist, numbers are like music, he can feel the symphony of equation. Petar is our Strategy
specialist. Some say he never lost a single round in Age of Empires. Finally, Andro as Captain
of the team, is sometimes referred as the “Jack of all trades”, he knows something of
everything. We are team comprised of innovators for the 21. century. As soon as we became
colleagues, we quickly learned how power of innovation can change our lives for good and
better. Those colleagues are now friends willing to think and innovate on large scale. Our
ambition is unlimited. Those who know us will know that we will settle for nothing short of
greatness. We belive that greatness can be achieved through global innovation. In his address
and endorsement of the national effort to land the Man on the Moon, president John F.
Kennedy said: “We choose to go to the Moon. We choose to go to the Moon in this decade
and do the other things, not because they are easy, but because they are hard, because that
goal will serve to organize and measure the best of our energies and skills, because that
challenge is one that we are willing to accept, one we are unwilling to postpone, and one
which we intend to win, and the others, too”. Following the brave and bold words of a man
who dared to change perception of a space we are living in, we choose to change the way
humanity is creating and consuming the energy. As Apollo rocket was needed for humanity to
reach the Moon, humanity of the 21. century needs big innovations to change perception of
how we use the energy. We choose to implement innovation in energy connectivity to change
the world, not because it is hard, but because it is necessary. We named our team SENTO
Solutions (derived from Smart ENergy TOken), following the quote from Vaclav Smil that
“energy is the only universal currency”. The base of our solution for energy connectivity is
affordable Software Defined Radio (SDR) USB stick (15-20$) packed with algorithmic
software which can read status data (consumption) from digital energy metering devices
(power, gas, even water). When this device is connected to smart device and Internet, user can
trace real-time consumption of his appliances anywhere, anytime. The generated information
is now live and useful. Device can detect power outage, short-circuit, gas and water leakage
and create more safer environment and even educate user how to save money by lowering
consumption. But, the real purpose of SDR USB and its software is to encourage users to save
energy and stake its information securely and privately through Internet on global ledger
blockchain or even Directed acyclic graph (DAG). If they do so, they are rewarded with SET
– Smart Energy Tokens (SET). SET is a result of staked information and algorithmic
validation and serves as proof of energy save. Through time, final result is creation of global
real-time energy information ledger. The possibilities are countless. Energy suppliers can plan
and receive real-time energy consumption and improve billing, create accurate profile classes
and plan better infrastructure projects etc. On top of savings, end user receives SET tokens
that can be exchanged for other goods and services in ever-changing environment of Internet
of Things and cryptocurrency economy. In future, SET tokens could be used for carbon tax
(CO2) payment for motor vehicles, home emissions, industry emissions. The holding value of
SET is based on incentive to save energy and stake information that would otherwise be
unuseful, locked in a digital meter in circuit-box of every home in the world. That information
is now global, ready for the 2nd Internet revolution.
CONTENTS

1. SENTO SOLUTIONS MODEL - SET token for the energy community of the 21st
century ........................................................................................................................................ 1
2. CONNECTIVITY ............................................................................................................... 3
3. SENTO SOLUTIONS - sNODE ........................................................................................ 4
4. TEHNICAL COMPONENTS OF sNODE ......................................................................... 6
5. SENTO SOLUTIONS SOFTWARE – 3ppleS ................................................................... 8
6. SENTO SOLUTIONS ELDAT (Energy Ledger Database) ............................................. 11
7. Smart Energy Token (SET) by Sento Solutions ............................................................... 13
7.1 Smart Energy Token - denomination......................................................................... 14
7.2 The cost of using the network and Network Echo ..................................................... 16
8. SMART CONTRACTS - forming and roles on the ELDAT network ............................. 17
9. INITIAL VALIDATION OF USERS ON THE NETWORK .......................................... 19
10. DATA VALIDATION ON THE NETWORK ............................................................. 21
10.1 Data Block and Proof-of-Save System ...................................................................... 22
11. THE ROLE OF MULTIPLIERS IN THE NETWORK, NETWORK EXPANSION
AND NETWORK CONSENSUS ............................................................................................ 25
11.1 Geographical multipliers ........................................................................................... 25
11.2 Allocation of multipliers in SET token accounting ................................................... 26
12. SENTO SOLUTIONS ECOSYSTEM – Local Energy Communities (LEC) for better
and sustainable future ............................................................................................................... 28
13. PARTNERSHIP IN SENTO SOLUTIONS PROJECTS .............................................. 30
14. REFFERENCE .............................................................................................................. 31
DISCLAIMER
This document is a draft version of the project and does not represent the official standpoint
of any team member. All information that was not the intellectual property of Sento Solutions
members belong to the original owners. The opinions expressed are in good faith and while
every care has been taken in preparing these document, Sento Solutions makes no
representations and gives no warranties of whatever nature in respect of these documents,
including but not limited to the accuracy or completeness of any information, facts and/or
opinions contained therein.
1. SENTO SOLUTIONS MODEL - SET token for the energy
community of the 21st century

The energy sector is an essential impulse in the further development and digitalization in the
world of the 21.st century. Electricity is a crucial element of the modern lifestyle and today
we depend on it more than ever before. Energy has, in that sense, became a key factor in the
development and further digitalization of the world, ushering the world's population into the
21.st century. Real-time digital connection has become the very foundation of the modern
lifestyle, and electricity plays a crucial role in that. However, energy production today is faced
with the ever-growing demand that breaks new records every year. The ever-increasing
digitalization of all the spheres of human communication and life in general presupposes an
unlimited growth in demand for electricity. The 2014 World Bank report shows that out of a
total of 23,864 billion kilowatt hours of the energy consumed in the world, almost 66, 44%
came from fossil fuels1. This data is further followed by a recent report by the International
Energy Agency (IEA) for the OECD member states in 2017, which shows that despite a
noticeable fall in production of electricity from coal, but also a significant increase in the
production of electricity from natural gas, the share of fossil fuels in total electricity
generation remains at an average of 55%.2

1
http://wdi.worldbank.org/table/3.7
2
https://www.iea.org/newsroom/energysnapshots/oecd-electricity-production-by-source-1974-2016.html

1
The ever-increasing demand for electricity results in the utilization of fossil fuels in
production, all in order to meet the growing needs of the world's population. The past and
present incidents in the nuclear power plants have resulted in the fact that almost 60% of the
world's electricity production is derived from coal, gas and oil. This is the dirty truth of our
times: our primary resource for the further development and connection of humanity is
derived from a hundred year old technology. The shares of renewable energy sources in total
production is gradually increasing, but at too slow a pace to meet the rising demand. The
European Union predicts that 50% of the total energy production in Europe will be obtained
from renewable energy sources by 2030, in the context of which the energy sector is a crucial
drive in the reduction of greenhouse gas emissions by at least 40%. 3 On the other hand, this
means that fossil fuels will still constitute a significant share in total electricity output. The
combustion of fossil fuels, as a result of electricity production, fills the Earth’s atmosphere
with thousands of metric tons of greenhouse gases and other harmful substances that directly
affect the change in the atmosphere, resulting in extreme temperatures and weather
conditions, which in turn cause climate migration of large portion of Earth’s population. With
the Worlds demands for electricity expected to rise 60% by 20304, fossil fuels power plants
will continue to pollute air and environment, with the cost of pollution paid by everybody on
Earth.

3
http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52016PC0864R(01)&from=HR
4
https://web.archive.org/web/20060622104453/http://iea.org/textbase/nppdf/free/2004/weo2004.pdf

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2. CONNECTIVITY

The idea of the Sento Solutions team is directed towards the dimension of connectivity as an
integral part of energy. It is our opinion that, for a radical change in the electricity production
system to take place, humanity must first change the way in which the information about
energy and consumption is communicated towards the final consumer, and to each other, in
the energy production system as a whole. A solid analogy for this particular case can be found
in the example of cars and roads. An incentive for buying newer and better cars throughout
history has definitely been the development of modern roads that facilitated a better and safer
travel for millions of people. We are looking for the same analogy in the production and
distribution of electricity. If we, as humanity, want to radically change the way we produce
electricity, we must first introduce the basic premise for creating modern and clean sources of
electricity, and that is the connectivity of systems involved in generation, distribution and
consumption of electricity. Although we are witness to the growth and development of
renewable energy sources in everyday life, connectivity in the context of the power grid has,
in most cases, failed to follow the trend of technological advancements and development. We
could say - why buy a new car, if we are going to have to drive it on dirt roads that will
increase maintenance costs and reduce driving comfort. We are faced with the same problem
in the production of electricity. Why invest in new and clean electricity generation
technologies from renewable energy sources, if the infrastructure itself is often outdated, rigid
and inadequate for modern production systems?

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3. SENTO SOLUTIONS - sNODE

Sento Solutions discovered a new opportunity and vision of the electrical network
connectivity in modern digital electricity meters that are, slowly but surely, replacing the
conventional induction motor meters. Modern digital meters are an immense source of
information that has not yet been utilized to a greater extent. The Sento Solutions concept
consists of a software-defined USB stick called sNODE, which is able to convert data, sent by
such digital meters, into useful information, which the user can access via the interface of
smart devices through special Sento Solutions software. Likewise, sNODE provides the
ability to securely and anonymously upload the information to the blockchain ledger, into a
kind of global database on energy efficiency. sNODE USB encourages the user to greater
energy efficiency, while consumption data can be anonymously sent to the blockchain ledger,
and the user is in turn rewarded with a SET smart digital token. Consumption data sent
through the blockchain system are compiled in a kind of a general ledger of energy
consumption called ELDAT (Energy Ledger Database). ELDAT thus presents a set of data on
consumption of sNODE users in real time, which creates a unique database with extremely
valuable information on consumer habits. The following diagram illustrates the process of
converting data into useful information and uploading them onto a blockchain ledger.

Diagram 1. Sento Solutions Flow Chart


Electric
Consumers Power Digital meter Data sNODE
Appliances
3ppleS
software
Smart TV
Households Internet
PC
SME
Industry
Smart
Information
devices
Algorithm

Data
protection
Energy Ledger
Security
Database ELDAT
Validation
blockchain
Consensus

Energy State
Proof of Save
Community Institutions

Small and
Smart Smart Energy Smart
Households Medium
contracts Token contracts
Enterprises

Electric Electric
power power
producers distributors

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The consumers as households, SMEs and the industry use different electrical consumers to
display their consumption through digital counters. Modern digital counters are able to deliver
wireless data. The sNODE device accepts such data and converts them using embedded
software and algorithm into useful information that can be displayed on smart device
interfaces. The user is thus able to monitor the electricity consumption in real time. Although
the flow chart in this context refers to electricity, Sento Solution's idea is to enable the
reception and processing of data of all digital metering counters, whether it is electricity, gas,
water, and the like.

The second phase of the sNODE device consists of the ability to transmit consumer
information to a blockchain ledger, while respecting the highest standards in data protection,
security, validation and consensus, which are integral to the concept of the blockchain ledger.
Blockchain ledger presents a kind of global book on electricity consumption, and is
collectively known as ELDAT (Energy Ledger Database). All the data on the blockchain
ledger are validated multiple times, the data is unalterable, and the personal user data is
protected through the cryptographic system. On the blockchain itself, in addition to utilizing
the primary function of the SET token, users can also utilize the smart contracts features of
the network, and thus communicate with each other in a protected environment. The
electricity consumption data itself is a valuable source of information, and as such, can serve
different purposes when published on the blockchain:

 Consumption overview in real-time


 Predicting future demand
 Peak consumption time on the grid
 Geographical position of electricity consumption
 Improvement in the charging system
 Increase in user safety
 Creating new value - increasing confidence of all parties involved

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4. TEHNICAL COMPONENTS OF sNODE

The essence of the technical component of sNODE is based on the scalability of the product.
In this regard, Sento Solution finds a scalability solution in using the SDR USB stick to
receive the digital electricity meter signals. The technical component of sNODE consists of
the Software Defined Radio USB stick, which already exists on the market.

Software defined radio systems “are characterised by their ability to be configured and
initialised on session initiation based on specific communication conditions
(e.g. user-, terminal-, network- or service/application-dependent) and then to be reconfigured
and re-adapted properly, even at run-time, following changes in their communication
environment.“5 The idea of Sento Solution is to take advantage of such a digitally managed
tuner and its frequency reception capabilities in combination with internally developed
software, in order to deliver the desirable product to the final customer. The fundamental
advantages of using such technology include:

 Technological simplicity in terms of production


 Low production costs
 Fast multiplication process
 Possibility of subsequent product upgrades (antenna systems)
 Product power supply via USB interface

The USB stick-based sNODE device presents a Sento Solutions answer to the challenge of
scalability of the idea itself. Such a product is not technologically complex, and the
production costs are extremely low since simple components are used in the production. The
picture shows the basic components of the SDR USB stick.

Picture 1. Internal components of SDR USB stick

5
Dillinger M., Madani K., Alonistioti N. Software Defined Radio – Architectures, Systems and Functions, page
xxxiv

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The basic technical features of the USB stick consist of an antenna input (RF-in), a tuner that
accepts radio frequency, an analog-to-digital signal converter and a USB interface for digital
signal transmission to the software interface. Antenna input (RF-in) is an optional component
for users who wish to increase the range of sNODE by using external antennas, while the
standard version of sNODE comes with built-in antenna inside the interface itself. sNODE is
designed to function as a plug-and-play system that does not require the user to possess any
specific product management skills. The most basic IT knowledge is sufficient. The USB
functions by connecting it to the USB interface (Smart TV, PC) that is capable of recognizing
such a device. When the smart device detects sNODE, the user is asked for permission to
install the associated official software called "3ppleS" (Sento Solutions Software), which than
guides the user in the configuration of the device. The following illustrations show the
conceptual image of Sento Solution's product layout.
Picture 2. Sento Solutions sNODE proposed hardware
layout

Basic characteristics of sNODE:

 Plug&Play system
 Custom made"3ppleS" software for network detection and validation
 Work autonomy
 Simple installation
 System upgrade possibility with accessories

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5. SENTO SOLUTIONS SOFTWARE – 3ppleS

Sento Solutions Software nicknamed "3ppleS" is a software component of sNODE. 3ppleS is


an application that grants its users insight into the consumer spending information and
provides access to other features that will be introduced in the Sento Solutions ecosystem.
3ppleS is a software component of the Sento Solutions project, which makes it an integral part
of the ELDAT blockchain operation and part of the management system for the individual
user, in general.

Picture 3. Sento Solutions "3ppleS" logo

The 3ppleS software is designed in two phases. The first phase of the software is focused on
the 3ppleS software capability to generate useful information based on data collected from
digital electricity meters, and making that information accessible on smart devices. The
second phase of the software is focused on the 3ppleS software potential to indirectly upload
the collected data via an Internet connection to ELDAT, anonymously and securely.

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Diagram 2. 3ppleS software phases

Smart
SET
Contracts

Smart
Wallet
devices

Digital meter sNODE 3ppleS Internet ELDAT

Infromation
User Validation

Calculation Algorithm

Motivation Consensus

Phase 1 Phase 2

The second phase of the 3ppleS software is therefore focused on the development of
algorithms and validation systems for both data and users on the network, and ultimately the
creation of an internal ecosystem that will allow communication between users and the
exchange of other services based on 3ppleS software and ELDAT blockchain.

Basic features of the 3ppleS software:

 Identification and registration of users


 Custom made algorithms and work autonomy
 Consumption data display (daily, weekly, monthly, yearly)
 Consumption data systematization (consumption structure)
 Transferring information to ELDAT via blockchain
 Integrated ELDAT wallet with SET token support
 The ability to identify other users on the network
 A basis for the further development of the ecosystem and additional services

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The picture shows the way sNODE works with 3ppleS software and other devices.

Picture 4. 3ppleS software work with sNODE and Smart Devices

Mining/
Validation
Consumption Community
p2p ELDAT
info participation
3ppleS

Internet connection

Consumption
Consumption PC
info
info

3ppleS SmartTV sNODE Smartphone 3ppleS

Communitiy
Community
participation
participation
Other SMART
USB Devices

p2p Consumption Smart Contracts


3ppleS New stuff
info

The Basic SNODE is able to connect to other devices that support the 3ppleS application. In
the case presented above, sNODE is able to connect to PC, SmartTV, Smartphone, and other
USB devices that have access to the Internet. If sNODE is connected to a PC, in addition to
standard data transmission via blockchain, 3ppleS application allows the user to participate in
data validation process, in creating a network consensus. Likewise, the application enables a
peer-to-peer communication with other network members and data exchange through smart
contracts. If sNODE is connected to SmartTV, the user is able to view current consumption
data, send such data to ELDAT, and communicate with other members on the network.
sNODE can also connect to the smartphone via the Internet, and the 3ppleS based Android or
iOS smartphone application is able to show the user current consumption data and enable
further participation in networking through connecting with other members. In the future,
sNODE will be able to connect to other USB smart devices that will facilitate data
transmission to ELDAT and enable users to connect with each other.

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6. SENTO SOLUTIONS ELDAT (Energy Ledger Database)

Sento Solutions ELDAT (Energy Ledger Database) is a blockchain system on which


information is transmitted from sNODEs. ELDAT represents a decentralized network
consensus. A consensus is made regarding all published data between all online participants.
ELDAT is a kind of distributed peer-to-peer network, whose prime driver is Internet of
today's generation. Due to its specific role in monetizing sensitive data on consumer spending
and the necessary need for complete transparency of published information, ELDAT is in its
essence a public blockchain with encrypted user data that is published on the blockchain
itself. It is important to note that ELDAT does not display any personal data of the network
user in any form, only the basic information on energy consumption. ELDAT thus introduces
a new level of transparency and democracy in the process of collecting and publishing
valuable consumption data while respecting the highest standards of security and user-
sensitive data protection.

Picture 5. ELDAT function in

User/sNODE

Block
ELDAT – ENERGY LEDGER

Consensus
DATABASE

Smart contracts

Transaction – Smart Energy Token

Peer-to-peer Network

Internet

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The system functions so that every user who is logged on through the 3ppleS application is
able to send consumption data via sNODE (either directly or indirectly). When enough
information is collected, they are classified into a block of information. Such block of
information is published on a network where a consensus is sought for the published
information. When the network reaches consensus for a particular block, it is published on the
blockchain and becomes an unchangeable part of the network. As soon as the information
becomes integral to the Blockchain system, all users who participated in the sharing of
information in the block, as well as those who participated in the formation of consensus for
the published information, are assigned a proportional amount of SET tokens. The following
diagram shows the system by which information from a digital electricity meter is converted
and transmitted to ELDAT.

Diagram 3. Consumption information conversion to ELDAT

Smart Energy
Token

Private
Data >
Data Encryption digital adress Validation
Information
- Wallet

Digital meter sNODE 3ppleS ELDAT

Real consumtpion data: Public digital adress: 0aH34TUN7SN


1. 00178945 kWh Send time: 13:44 GMT
2. 00067432 kWh Release time: 14:02 GMT

As shown, the digital counter records actual consumption data, sNODE accepts such
consumption data and converts them into useful information using the 3ppleS software. When
a user decides to send information to ELDAT, the 3ppleS software encrypts the consumption
data and publishes such data in block form on the network. When the block of information is
validated, each associated user is permanently recorded on ELDAT in the form of his own
unique public digital address, the time of uploading consumption data and the time of release
of the designated block on ELDAT. Likewise, with the validation of the block, each user in
the published block is assigned a proportional amount of the SET tokens to be sent to the
user’s public digital address and ultimately into his wallet (user's private digital address).

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7. Smart Energy Token (SET) by Sento Solutions

The basic reward for a network user who decides on sharing the consumption information on
ELDAT is the Smart Energy Token (SET). The SET token is a digital energy token that is
assigned to the user as a reward for successfully sending data to ELDAT. In that sense, SET
represents a successful monetization of user's uploaded consumption data. The basic value of
a SET token lies in the fact that it is needed to access the published data on ELDAT. In this
respect, the supply and demand market for the energy token is created, which will evolve
according to the growth of the number of sNODE users and the quantity of published data on
ELDAT. The value of a SET token can thus be divided into value for the internal and external
economy. The SET token is used in the internal economy of ELDAT blockchain to establish
smart contracts, exchange other services within the peer-to-peer economy, create local energy
communities, maintain secure communication, digitally sign contracts, and unlock consumer
information. In the external economy, the SET token holds its value in the exchange parity
with other established crypto currencies and the associated services and products on which
they are based. This ultimately means that the SET token can be exchanged through existing
crypto currency parities such as Bitcoin (ETH) or Ethereum (ETH) for fiat (USD, EUR and
the like) on established exchange on the Internet.

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Smart
Energy
Token
INTERNAL ECONOMY EXTERNAL ECONOMY

 Deploymnet of Smart  Cryptocurrency exchange


Contracts  Fiat exchange
 Exchange within peer-to-  Pollutions and emissions
peer blockchain economy trading markets for industry
 Creating Local Energy sector
Communities
 Secure communication
 Digital signature

According to this setup, the SET tokens hard cap is set to 100,000,000 SETs (one hundred
million). From the allocation pool, a certain amount of the SET tokens will be separated for
future partnerships with all stakeholders of this project, while the remainder will
automatically be allocated for each information successfully submitted to ELDAT.

7.1 Smart Energy Token - denomination

Due to the specificity of the internal economy and functioning of the blockchain system, and
the need to maintain the necessary network consensus for all published data, the SET token is
denominated to a smaller unit – Network Echo. One SET token provides an equivalent of one
million Network Echos on the network.

1 SET = 1.000.000 Network Echo

The denomination has been made to help the user more easily identify the value of certain
transactions (costs) online, in order to maintain an incentive and systematic consensus on all
data published on the network.

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The value of a SET Token in the system is reflected in its importance when unlocking the
information published on ELDAT. We could say that ELDAT is a kind of bulletin board of all
published information, but to access the information itself, it is necessary to use the SET
token to unlock the information. In the internal economy of the ELDAT system, the unlocking
of a single information published on ELDAT is evaluated in parity:

1 user's digital address = 10.000 Network Echo

According to the aforementioned principle, 1 SET token would unlock information about the
consumption of 100 published user's public digital addresses on ELDAT. The diagram below
shows an example of unlocking information using 1 SET token.

Diagram 4. Information unlocking process on ELDAT

Information
1 SET = 1.000.000 Echo
unlocking
ENERGY LEDGER DATABASE (ELDAT)

Period: 01.01.-31.01.
Public digital address: hfbw37z29f 10.000 Network Echo Peak usage: 114 kWh
Off-peak usage: 95 kWh

Period: 01.01.-31.01.
Public digital address: 2uf42ofuh2uf 10.000 Network Echo Peak usage: 124 kWh
Off-peak usage: 25 kWh

Period: 01.01.-31.01.
Public digital address: nj2823zf28z2 10.000 Network Echo Peak usage: 454 kWh
Off-peak usage: 125 kWh

Period: 01.01.-31.01.
Public digital address: 2ifho2hfh2ioh 10.000 Network Echo Peak usage: 174 kWh
Off-peak usage: 85 kWh

Period: 01.01.-31.01.
Public digital address: d2io3nfi22398 10.000 Network Echo Peak usage: 1234 kWh
Off-peak usage: 1345 kWh

Period: 01.01.-31.01.
Public digital address: i3hfi2293fwh 10.000 Network Echo Peak usage: 133 kWh
Off-peak usage: 120 kWh

0,94 SET = 940.000 Echo

In the example above, the interested party wants to get information about spending for 6
digital addresses. The interested party is currently holding 1 SET token or 1,000,000 Network
Echos in its own wallet. Unlocking the information of published digital addresses on ELDAT
means that the interested party receives accurate information about electricity consumption
rates over a given time period at peak and off-peak hours. After the unlocking of information

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with aforementioned parity of 1 digital address = 10,000 Network Echo, the utilized Network
Echo is returned to a shared pool for allocation, while the interested party retains 0.94 SET
tokens or 940,000 Network Echos in their digital wallet. Within this peer-to peer network,
each user can communicate with other users, receive and send messages, and perform other
actions such as shaping smart contracts in the internal ecosystem.

7.2 The cost of using the network and Network Echo

Each blockchain network contains its own costs, which are a constituent part of maintaining a
consensus. Due to the need to validate the data, other users on the network must validate each
published information. In order to create an incentive for other online users to enter the
validation system, there must also be a kind of reward for successful data validation. Each
publication on the blockchain therefore contains a certain network cost, which is to be paid
through the designated currency - the payment with Network Echos.

Example 1. User A wants to transfer the amount of 2 SET tokens through the ELDAT
blockchain system, based on mutual agreement with user B. Through a 3ppleS system order,
the amount of 2 tokens from the user A's wallet is allocated and sent to the user B's wallet.
The cost of such a transaction on the ELDAT network amounts to 1000 Network Echos, which
are allocated to the users who participated in the validation of the transaction.

Example 2. The user wants to establish a smart contract via ELDAT blockchain for a specific
service traded within the 3ppleS ecosystem. User lists all the parameters that the service has
to meet in the smart contract, together with its cost. After setting up a smart contract, the user
pays a designated cost of network usage (contract validation expense) in the amount of 5,000
Network Echo. By paying Network Echo, the user's smart contract becomes active and is
executed automatically according to the given service quality parameters and its cost.

Type of action on ELDAT ELDAT network cost


Public digital adress unlock 10.000 Network Echo
Setting Smart Contract 5.000 Network Echo
SET token transmission 1.000 Network Echo

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8. SMART CONTRACTS - forming and roles on the ELDAT network

Smart contracts are autonomous programs that work on the blockchain platform itself and
represent a further development of the blockchain system. Smart contracts allow for
flexibility, programmability and control over the user's actions, all of which they receive in
accordance with network capabilities. A smart contract includes in itself a particular network
logic upon which it is based, and it is executed automatically when certain conditions,
specified in the smart contract itself, are met.

In summary, a smart contract has the following four properties6:

 Automatically executable
 Enforceable
 Semantically sound
 Secure and unstoppable

Smart contracts are conceived on the ELDAT network as a further network development
where users can exchange specific information and services that will be generated by the
growth and development of ELDAT. For example, it is not difficult to imagine that in the
future, users could also exchange other ELDAT services, such as local power generation.
Since ELDAT is able to provide an overview of short-term supply and demand markets in
certain areas, it is easy to imagine that in the future, ELDAT will also provide purchases and
sales of electricity generated from renewable energy sources within local communities
through smart contracts.

6
Imran Bashir: Mastering Blockchain, page 201.

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Diagram 5. Proposed Smart Contract Decentralized Exchange on ELDAT

BUYER

SET token

FOREIGN
EXCHANGE Smart
DECENTRALIZED EXCHANGE
Buy order
contract

SET token

ELDAT BLOCKCHAIN
CRYPTO

Smart
FIAT contract
Sell order

SET token

SELLER

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9. INITIAL VALIDATION OF USERS ON THE NETWORK

In order for a user to start sending data to ELDAT, an initial validation of the network user is
required as to prevent the misuse of data from the digital electricity meters not owned by the
network user. As shown in the flow chart below, the network user, through his own sNODE
and 3ppleS application, inputs basic information like his full name and unique serial number
of digital electricity meter. After entering the data, encryption is conducted, and given data is
molded into the basic smart contract to which a unique digital lock and a validation request
are assigned. That basic smart contract is then sent to the ELDAT network where it awaits
validation. On the other side, the electricity distributor inputs its user base through the 3ppleS
system, along with the names and surnames of consumers and serial numbers of their
respective electricity meters. Such a database is encrypted and introduced into a smart
contract that generates a unique digital key and a validation request for all network users
whose digital locks match the network operator's digital keys. On the network itself, such
smart contracts are automatically unlocked, validated and executed on both sides. Finally,
successful confirmation of the new member of the ELDAT network is sent to the respective
user and distributor of electricity.

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Diagram 6. Initial validation of user on ELDAT
Digital
Personal
Padlock
Information Assignment
SET token

Basic Basic Smart


USER sNODE 3ppleS Encryption
User Data Contract

Request for

ENERGY LEDGER DATABASE (ELDAT) BLOCKCHAIN


Digital
validation of
Meter ID new User

New User
Yes

Smart
Confirmation Validation Contract
Execution

No
Energy
Distributor

Personal Digital Key


Informati Assignment
on

Energy Users Smart


3ppleS Encryption
Distributor Database Contract

Request for
SET token Digital
validation of new
Meter ID registered users

ELDAT assumes the protection of all published data, in particular data on the network user
databases. Any information published by the network operator is protected and not publicly
shared at any time; the network operator's database encryption serves only for the initial
validation of network users utilizing their services, in order to achieve the necessary
consensus on the network itself.

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10. DATA VALIDATION ON THE NETWORK

In order to reach a consensus on all the data published on ELDAT, and to ensure the
participants that all of the information published on the network is true and unchangeable, it is
necessary to validate the information that is published in blocks on the network.

The process starts with sNODE that receives the data of digital electricity counters. Data is
then encrypted and published on network via the 3ppleS application, in the form of a block,
together with the data of other users. Then the process of validation starts with the
participation of other private users who are connected to sNODEs and 3ppleS over their PCs.
On the other hand, energy distributors are also participating and the process of validation of
published data in the block form is carried out. In this way, the system provides a possibility
to geographically validate data through interconnected sNODE devices in signal range on
geographical location together with energy distributor’s internal data. In this way data is
double checked before in validation process.

Diagram 7. Information validation process

Algorithm

Digital meter sNODE Validator PC 3ppleS


GEOGRAPHICAL LOCATION

Objava
informacija
Wallet

ENERGY LEDGER DATABASE (ELDAT) BLOCKCHAIN


Algorithm Network
Echo

Block
Validation Proof-of- Smart Energy
Digital meter sNODE 3ppleS Encryption announcement
process Save Token
on network

Network
Wallet
Echo
INFORMATION VALIDATION

Algorithm

Energy Internal
3ppleS Encryption
Distributor Database

Wallet

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10.1 Data Block and Proof-of-Save System

The data block contains information from all users that have been collected and published in
the form of a block at a certain time. Blocks of data for which there is a consensus on the
network are linked to blockchain ELDAT. Since the goal of Sento Solutions is to reduce the
energy consumption needed to validate the data in the block and on the network generally, the
cryptographic and algorithmic model used to protect the block, while validating it, is built
around a certain Proof-of-Save model. The Proof-of-Save model implies the primary use of a
CPU (Central Processing Unit) for data validation using a mathematical model with a constant
hash rate. The Proof-of-Save model is a modified Proof-of-Stake validation model, commonly
known as data mining. The system rests on the unique weight of the cryptographic algorithm
that needs to be unlocked so that the transaction becomes valid, with the use of deposits as
means of securing the network from malicious usage. Users who wish to use their computers
and equipment to participate in validating online data must participate with a minimum
amount of 1 SET, an amount that is, together with other parameters, proportional to their
ability to participate in validating online data. This is expressed in the Proof-of-Save formula:

Proof-of-Save = Number of SET Tokens * computing power of the PC * Time spent in the
validation system

Number of hours
Number of SET as Allocated computing
Proof of Save weight spent in validationy
collateral power of PC
system
Weight 70% 20% 10%

Example 1: The user has decided, in addition to standard data transmission to ELDAT, also
to utilize the 3ppleS application on his PC and has opted to validate data on ELDAT. In order
to do so the User deposits the required amount of SET tokens through his account in the
3ppleS application, as collateral for the purpose of participating in the network. For this
purpose, the user has separated 10 SET tokens from his wallet as a collateral for the
validation process and has started the process of participating in the validation of new data.
Since he has allocated the 3 GHz processor power of his computer for the validation process,
with the zero hours spent in validation system, the probability for his computer to be selected
in the validation process is:

Proof-of-Save = 10 * 0,7 + 3 * 0,2 + 1 * 0,10 = 7,7%

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In translation, with 0 hours spent in the validation system, 3 GHz of allocated processor
power and 10 SET tokens of collateral, the user has 7.7% probability that he (his PC) will be
selected to validate the newly published block on the network.

It is important to note that the greatest weight refers to the SET tokens as a fundamental
protection against possible manipulation of data, or to increase the credibility of the validator
(miner) on the network. For example, we can assume that, if a certain validator puts down a
larger amount of SET tokens as collateral for the validation process, the probability for him to
be selected for block validation is higher. However, this also means that if an abuse of the
data block by the malicious software comes from the validator himself, he automatically loses
his collateral since the block is validated multiple times by other active validators on the
network. The weight in the validator's allocated processor power encourages users to engage
the validation processes with stronger computer components that reduce the block unlocking
time (time needed to solve the mathematical model by which the block is encrypted), and also
the time needed for validation on the network. As a third component, the weight in the
validation system time rewards and encourages validators to be involved in the validation
process for as long as possible, in order to maintain the necessary number of validators for a
long-lasting and consistent network consensus.

Diagram 8. Published Solution re-check by other validators on network

Solution Solution
Validator 1 Validator 3
check check

Solution Published Solution


Validator 2 Solution Validator 4
check check

Published
Validator 5 Validation Proof-of-Save
Block

Consumption
info release
on ELDAT

23
On the diagram, a possible sequence of data validation on the network is displayed. In this
case, Validator 5 managed to validate one block of information on the network by
successfully establishing a validation system. Validator 5 announces that the Proof-of-Save
has been achieved on the network itself, and publishes his cryptographic solution for the
block. Other online validators participate proportionally in the verification of the solution
published on the network (each is awarded with a certain percentage of Network Echo out of
the total amount in the block), thus confirming that the validated solution of Validator 5 is
true. When a minimum of ten validators is reached, the block information is linked to the
previous block in ELDAT.

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11. THE ROLE OF MULTIPLIERS IN THE NETWORK, NETWORK
EXPANSION AND NETWORK CONSENSUS

Since the ELDAT system is based upon a belief that all the aforementioned features of the
sNODE and 3ppleS systems will attract users in greater numbers, as to achieve massive usage
and data circulation in the short term, Sento Solutions has designed multipliers as stimulating
measures for effective geographic spread of the ELDAT network, but also to create the
necessary network consensus and for the efficient and rational use of electricity in general.

11.1 Geographical multipliers

Geographical multipliers are conceived as an incentive to expand the sNODE network to


geographic locations where no ELDAT information is available. For example, if no ELDAT
data is transmitted at a particular geographical location, a user who decides to purchase
sNODE and use it in that particular geographic location can use the ability to multiply the
amount of energy currency obtained by sending his own information, along with the
information from other users who do not have sNODE but are registered in 3ppleS.

Picture 6. Interconnection with sNODE on locations

NUMBER OF DIGITAL METERS


LOCATION A

sNODE

REGISTERED USERS

ENERGY LEDGER DATABASE - ELDAT

REGISTERED USERS
LOCATION B

sNODE

NUMBER OF DIGITAL METERS

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11.2 Allocation of multipliers in SET token accounting

The role of the multiplier in the ELDAT system encourages the user to better exploit all the
features of sNODE, in addition to basic action of sending information to the ELDAT
blockchain. Each user starts with the basic multiplier 1.0, while all other multipliers are
strictly related to the user's further behavior. Thus, a 0.5 multiplier is added to the basic
multiplier 1.0 if the sNODE user decides to be more energy efficient in the use of electricity.
For example, a multiplier-based user is assigned a multiplier for energy efficiency if the
3ppleS software and algorithm can prove that the user was more energy-efficient in the
exploitation of electricity over a certain period. For example, if a user chooses to use home
appliances (dishwasher, washing machine) only at the time when lower tariffs are applied, the
3ppleS system will allocate a proportional amount of multipliers due to his impact on
reducing the load on the network infrastructure at critical moments of time. If, for example,
user installs electricity production systems that are connected to a digital electricity meter, the
3ppleS software, through sNODE, can detect that the user generates electricity and therefore
accordingly allocate a proportional multiplier for the period in which the proof of user's
actions exists.

TYPE OF ACTION MULTIPLIER


Basic infromation transmission 1.0
Energy efficiency +0.5
Energy production +0.7
Information relay for other users via sNode +0,1 per new user

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Picture 7. Allocated multipliers based on sNODE info relay

User 1 User 2 User 3 User 4 User 5 User 6 User 7


GEOGRAPHIC LOCATION 1

Digital meter Digital meter Digital meter Digital meter Digital meter Digital meter Digital meter

sNODE sNODE sNODE sNODE sNODE sNODE sNODE

Multiplier: 1.0 Multiplier: 1.0 Multiplier: 1.0 Multiplier: 1.0 Multiplier: 1.0 Multiplier: 1.0 Multiplier: 1.0

ENERGY LEDGER DATABASE (ELDAT) BLOCKCHAIN

Multiplier: 1.7
GEOGRAPHIC LOCATION 2

sNODE

Digital meter Digital meter Digital meter Digital meter Digital meter Digital meter Digital meter

User 1 User 2 User 3 User 4 User 5 User 6 User 7

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12. SENTO SOLUTIONS ECOSYSTEM – Local Energy Communities
(LEC) for better and sustainable future

The Sento Solutions project enables end-users to create and join into Local energy
communities, where they can operate in their local enviroment to boost energy efficiency and
encourage clean energy production.

Picture 8. Local Energy Community on specific geo location

LOCAL ENERGY COMMUNITY

GEOGRAPHICAL LOCATION

Production
Energy
of User 1
efficiency
User 2
electricity

Energy
sNODE 3ppleS 3ppleS efficiency
JOINT DECISIONS OF L.E.C.

 DPOS - Delegated Proof-of-Save


 Multiplier assignment
 Mutual agreements and
decisions through the Smart
Contract
 Joint decisions on other L.E.C.
sNODE 3ppleS

Energy Energy
efficiency
User 3 3ppleS User 4 efficiency

As shown from picture above, on one geographical location there are 4 users joint into Local
energy community. User 1 is using sNODE combined with 3ppleS software and is producing
electricity through his locally installed system and is also being energy efficient. User 2 is
using only 3ppleS software and is sending its data to ELDAT via sNODE of User 1.
Likewise, User 4 is also only using 3ppleS software and sending data via sNODE of User 3.
They are all united into Local energy community, where they can work together to boost and
encourage greater efficiency in energy consumption and production. Delegated Proof of Save
system gives ability to most active users more multiplier allocation based on their
commitment in energy efficiency. Users joint in L.E.C. establish roles and obligations based
on Smart Contracts which are automatically executed upon achievement of goals or
obligations.

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Local Energy Communities form a vital role in building ecosystem because they are able to
act quickly and efficiently in building better and sustainable systems. Likewise, LEC's are
able to quickly identify and act upon vulnerable social groups that lack access to energy.
Sento Solutions enables LEC's to create a viable system that can use energy consumption info
in form of SET token to build projects that can help those who lack access to energy. LEC's
are encouraged through Smart Contracts to create, vote and execute projects that will impact
the lives of those misfortunate that lack access to something that we consider a basic human
right – electric power. LEC’s are able to allocate amount of SET tokens to network Energy
Parliament where they can vote on projects, action methods and use the power of networks
transparency and direct democracy to fund great projects that will have fast and
straightforward impact on the lives of others.

Picture 9. Local Energy Communities project voting system


LOCAL ENERGY COMMUNITY 1 LOCAL ENERGY COMMUNITY 2

ENERGY PARLIAMENT
SET SET
 Smart Contract decisions on new
TOKENS TOKENS
projects for community
 Voting automation with Smart
Contracts
 Transparency and democracy in
Smart decisions Smart
contract  Action methods contract

Smart
Contract

Smart Smart
contract FUND ALLOCATION POOL contract

LOCAL ENERGY COMMUNITY 3


 Token allocation by the Parliament LOCAL ENERGY COMMUNITY 4
 Blockchain Fund Data

SET SET
TOKENS TOKENS
PROJECT

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13. PARTNERSHIP IN SENTO SOLUTIONS PROJECTS

The team is aware of a wide range of partners that need to be covered to make the project live.
These partners include the network of energy distributors that are crucial part of consensus
network, software developers with experience in data connection, blockchain architects that
can build proposed layout network, digital meters production companies that can enable valid
data transfer, SDR production companies that can build specific hardware. Sento Solutions
partner network will receive allocated SET tokens as a form of incentive to join this project.
Partner allocation pool (PAP) is judged by partner’s data importance and usefulness on the
network and also the amount of data shared. Partners will receive proportional amount of
tokens based on these facts and will enter with their data into active consensus network.

Picture 10. Proposed partner network incenitves

PARTNER NETWORK SENTO SOLUTIONS Partner PRIVATE USERS


Allocation Pool (PAP)

Data
usefulness
Digital meter
and
importance
Partner 1 Database

ENERGY LEDGER DATABASE (ELDAT) BLOCKCHAIN


Amount sNODE
of Data
3ppleS wallet

3ppleS
Multiplier
Partner 2 Database

Validation
SET token Validation
process
3ppleS wallet allocation process
participation

PC
Partner 3 Database

3ppleS
3ppleS wallet

sNODE

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14. REFFERENCE

1. Imran Bashir: Mastering Blockchain – Distributed ledgers, decentralization and smart


contracts explained, 2017.
2. Dillinger M., Madani K., Alonistioti N.: Software Defined Radio – Architectures,
Systems and Functions
3. Narayan Prusty: Building Blockchain Projects: Develop real-time practical DApps
using Ethereum and JavaScrip, 2017.
4. Kariappa Bheemiah: The Blockchain Alternative: Rethinking Macroeconomic Policy
and Economic Theor, 2017.

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