The smart contract is the tool to make sure* that transferred Ether results in power being transferred. Of course we could just use a blockchain like Bitcoin and define "send x BTC to wallet y and I promise you will get your power" - but in that case, the blockchain can just guarantee the value transfer, not the subsequent actions being undertaken.
* since this involves interaction with the outside world, I don't know a way at this point that 100% guarantees that your get your power. Curious how they tackle this.
Ethereum cannot guarantee that power will be transferred. It's just numbers in a blockchain. Users still have to trust that the electricity provider will give them power. The blockchain has just added complexity with no benefits here.
This seems like a perfect use-case for payment channels, e.x. Lightning Network:
Car continuously delivers micropayments to charger while charger continuously delivers power to car, if one stops the other also stops. If the power is cut off prematurely the car only loses maybe a couple cents worth of power.
(Payment channels are built using smart contracts, but they’re simple enough that Bitcoin’s more limited smart contracts can do it)
That happens today: when I pump gas into my car, the price on the display goes up. When it hits the limit, the gas flow stops. No blockchain is required.
The difference is there is no counterparty risk. Not with the gas station, not with Visa.
Admittedly that’s not a big problem with gas pumps (at least where I live, though card skimming is definitely a thing) but you can easily imagine other use-cases. For example your computer could automatically pay an untrusted WiFi hotspot per MB (and automatically pay the VPN you use to secure said untrusted WiFi hotspot)
Zero counterparty risk digital microtransactions have never been possible until now. I’m pretty sure it will eventually be cryptocurrency’s killer application.
There's still counterparty risk: I could start paying the wifi hotspot but there is no guarantee that it will let me use what I've paid for. At any point, the next microtransaction could fail because the counterparty decides to steal my cash.
My point is if you can make the microtransactions arbitrarily small you can make the counterparty risk negligible.
If I’m sending 1 cent micropayments continuously as long as the services are being delivered (e.x. 1 cent per 1 MB WiFi, 0.1 kWh electricity, or 0.5 oz gasoline, etc) then the most that can be stolen is 1 cent, so why would they bother?
* since this involves interaction with the outside world, I don't know a way at this point that 100% guarantees that your get your power. Curious how they tackle this.