## 3 The Third Industrial Revolution (TIR) and Energy Internet
### Network Coding  
The rationale behind network coding is to extend the functionality of nodes in communications networks from traditional routing, switching, and forwarding individual packets on a per-packet basis to performing bit- or packet-level operations on multiple packets by generally using linear algebraic approaches, leading to an improved network performance in terms of throughput, delay, reliability, and other metrics. For illustration, Figure 3 shows the potential of network coding to increase the bandwidth efficiency and thus throughput of a conventional power-splitting PON. In the considered scenario, two packets are exchanged between two ONUs. Owing to the PON's directional splitter/combiner, ONUs may communicate only through the intermediary of the OLT. In conventional PONs, such an exchange is usually performed in four separate packet transmissions, with the OLT receiving and then broadcasting each packet individually (see Figure 3a). With NC, the OLT may code the received packets into a single packet using a simple bitwise exclusive-OR (XOR) operation, denoted by \(\oplus\) (see Figure 3b). Upon receiving the coded packet, the ONUs decode the packets destined to them using a copy of their previously transmitted packets. NC hence achieves the packet exchange in only three packet transmissions, using 50% less downstream bandwidth than conventional PONs. Importantly, note that the above network coding operations could be implemented in software without requiring any hardware modifications of EPON and thus making the upgrade easy and less costly. To showcase the beneficial impact of network coding on not only the throughput but also delay performance, Figure 4 depicts simulation results on the performance gains of a network coding enhanced EPON with 16 ONUs equidistantly located at 20 km from the OLT. Figure 4: Performance enhancements of an EPON through network coding. Figure 3: Network coding in a power-splitting PON. For arbitration of upstream transmissions, the well-known interleaved polling with adaptive cycle time (IPACT) algorithm, a benchmark DBA algorithm for EPON, with limited service of 15 kbytes per ONU in each polling cycle is deployed. Under the assumption of uniform Poisson traffic with a packet size uniformly distributed over the interval [64; 1; 518] bytes, intra-PON traffic is generated by any given ONU and is destined to any of the remaining ONUs. Whereas external traffic represents downstream traffic originating from the OLT and destined to ONUs. In the following, the external traffic rate is fixed to 0.5 Gb/s and the intra-PON traffic rate is varied from 0.1 Gb/s to 0.9 Gb/s. The aggregate throughput plots of Figure 3(a) show that coding gains appear at the point of congestion, when the intra-PON traffic load is 0.5 Gb/s. This point corresponds to the input aggregate traffic level (of both intra-PON and external packet streams) reaching the downstream data rate. As the OLT downstream queues backlog grows, more coding opportunities arise, and the coding gain increases almost to 30% (0.2 Gb/s) for intra-PON traffic. Note that throughput gains are also achieved by the uncoded external traffic stream, reaching 27% (0.1 Gb/s) at the highest intra-PON traffic load. Importantly, Figure 3(a) clearly demonstrates that with network coding a mean aggregate throughput well above the nominal EPON data rate of 1 Gb/s can achieved. In other words, a network coding enhanced EPON is able to carry higher offered traffic loads beyond the point of congestion by reducing the volume of carried traffic via network coding. In doing so, network coding is a powerful technique to avoid or at least postpone costly capacity upgrades of current EPONs and thereby extend their lifetime significantly. Figure 3(b) depicts the average steady-state size (_i.e._, occupancy) of the corresponding OLT downstream queues. We observe that the downstream queues at the OLT for the network coding enhanced EPON saturates at significantly higher traffic loads compared with a conventional EPON.