The ongoing saga of the Boeing 787 Dreamliner has resulted in a surge of partial or completely misleading stories about modern battery technology. While I’m far from an expert in the field, it’s one I follow closely, and I think I can contribute an “interested outsider” perspective on the state of rechargeable batteries and related technologies, circa 2013.

Let’s start by talking terminology. Lithium-Ion is an umbrella term, which represents a whole family of technologies. Simply knowing that a given application (like an airplane) makes use of “lithium-ion batteries” tells you very little about the performance, safety, and reliability characteristics of those batteries.

Battery technology is a materials-science intensive field, so it should come as no surprise that material choice is the key differentiator between batteries in the lithium-ion family. The three core components of a battery are the cathode and anode, and the electrolyte which separates them.

While there are hundreds of combinations of materials in use, depending on the intended application (and the patent pools of their backers), the most meaningful differentiation to be aware of is the types of positive electrodes (cathodes) in use.

The three primary families of cathode materials, and those worth knowing a little something about, are lithium-cobalt, lithium-iron-phosphate, and lithium-manganese. Each has different pros, cons, and risks.

A further note about terminology here – seeing types of electrodes written in this fashion might cause you to think that other terminology, like lithium-polymer, also refers to electrode choice as well. Unfortunately, it’s just confusing terminology. In fact, lithium-polymer refers to the the electrolyte, and a lithium-polymer battery can use any of the above mentioned electrode materials. Your laptop, for example, almost certainly uses lithium-polymer batteries with lithium-cobalt cathodes.

In addition to being track five on Nevermind, lithium is a highly reactive material. If you’re familiar with the reaction of potassium being dropped into a beaker of water, it’s very similar.

Now, a battery doesn’t contain pure lithium. That’s why you’re not on fire right now. The lithium is bonded with another material – that’s the cobalt, iron-phosphate, etcetera. These molecules also include oxygen. When exposed to high temperatures, these bonds can break down, resulting in nice, reactive lithium, along with fire’s friend, oxygen. In the case of a battery, a high-temperature situation can result from poor charging circuitry, short circuits, punctures or other external trauma. Since a battery generally consists of many cells, a single failed cell can easily produce enough heat to initiate a chain reaction.

Lithium-cobalt is the most common type of lithium-ion cathode, and delivers high energy density, relatively low cost manufacturing, and decent longevity when managed properly. The primary downside is that the lithium-cobalt bond is relatively weak, meaning these are generally types of lithium batteries which are at fault when you hear about battery fires. See, for example, the 787.

The most common alternative to lithium-cobalt is lithium-iron-phosphate. The A123 Systems batteries I’ve written about in the past are a derivative of this technology. The lithium-iron-phosphate bond is inherently more stable, even when abused or severely heated. The structure of the lithium-iron-phosphate molecule is such that it takes far more energy to free the lithium. Thus, these batteries are ideal for environments in which safety is key – automotive uses for example.

Now, it’s fair to ask why the Boeing 787 doesn’t use this type of battery. I’m obviously not privy to the internal engineering decisions at Boeing, but I can hazard a guess. First off, the battery design for the 787 was locked in 2005 or 2006. Back then, the technology for lithium-iron-phosphate was relatively immature and volume use wasn’t common. Additionally, for a given power output, a lithium-iron-phosphate battery will be larger and heavier than a corresponding lithium-cobalt design – this would have been even more pronounced in 2005.

In addition, the types of situations in which a lithium-iron-phosphate design is “safer” don’t commonly occur on an aircraft. For example, if the relatively small battery of a 787 is engulfed in flames, there are far, far bigger issues to worry about. The risk in an automotive implementation is that a relatively minor accident that damages the battery pack could cause a thermal runaway condition. There don’t tend to be “relatively minor” accidents involving massive jets. The other types of issues that can cause problems with batteries should be able to be mitigated through external controls – smart chargers with fused links in the case of overvoltage, etcetera. When we finally learn (if we learn) what caused the issues on the 787, I would suspect we’ll find that at least part of the cause was poor design or manufacturing issues surrounding these systems, rather than in the battery cells themselves.

There are a variety of other cathode chemistries in various applications. In particular, lithium manganese oxide and related manganese compounds provide better longevity and performance in harsh environments, but don’t yet excel in general purpose situations.

Supercapacitors represent another, related family of energy storage technologies which occasionally spawns a lot of interest, without necessarily a lot of results. Like all capacitors, the supercapacitor (ne ultracapacitor) stores a static charge using a variety of different materials. A supercapacitor can store energy very quickly, for a relatively long time, and survives a far greater number of charge cycles than a chemical battery. Unfortunately, supercapacitors store a relatively small amount of energy and are thus more appropriate to high-output low-duration implementations. Over time, capacity is improving, but the overlap between supercapacitors and traditional batteries is still relatively small – powertools and a few other small gadgets. Cost is still a limiting factor as well.

Longer term, supercapacitors have a lot of potential in energy recovery applications – for example, regenerative braking. But, beware startups promising orders of magnitude advances in supercapacitor technology. There are many out there making such claims, and none have been able to demonstrate solid evidence of their viability.

The reality is that, barring some “out of left field” advance, battery technology looks set to improve in relatively small steps as materials science advances, nanotech manufacturing processes improve, and overall volume drives down costs. An electric car that can charge in seconds and deliver a 500 mile range seems unlikely in the coming decade. But the more relatively-decent electric cars you buy today, the more realistic that future car becomes. I’m sure Tesla, Nissan, and Fisker would appreciate it as well.

I recently wrote about my attitudes toward Kickstarter, the imperfect but exciting crowdfunding platform. Now, I’d like to turn my attention to a related and similarly exciting use of crowdfunding as an investment vehicle.

(Aside: for those who are interested in Kickstarter, be sure to read this analysis of Kickstarter’s impact on CES from The Verge)

First, if you’re not already familiar with the concept of an accredited investor it’s worth a brief review. In short, if your income tax didn’t go up at the start of 2013, you’re not an accredited investor. Don’t feel bad – we’re much more fun than them.

Normally, in order to purchase equity in a company, the company either needs to be listed on a public exchange, or minimally, the company needed to register a security with the SEC. Needless to say, that presents a non-trivial barrier to entry. Startup companies have been prohibited from raising funds by appealing to the general public. That’s why you can’t get shares in a company when you invest via Kickstarter.

This situation has changed dramatically over the last eighteen months. First, increased interest in the general notion of crowdfunding has resulted in clever “circumvention” of some of these restrictions (more on this in a moment). Second, the JOBS act, passed in March of 2012, creates (or will create) a variety of provisions for direct investment in startups, regardless of personal income status.

It’s important to draw a distinction between this type of crowdfunding and person-to-person lending, as they often get mentioned in the same breath. Person-to-person lending, either as a non-profit endeavor via services like Kiva, or as a for-profit endeavor like Lending Club, connects lenders with borrowers directly. Groups of lenders are connected to loan money to a borrower, who repays the loan to those lenders with a reasonable interest rate (or none at all in some cases). Lenders can, potentially, resell loans on a secondary market, but generally these are long term illiquid investments. Lending Club loans help fund debt consolidation, home and auto refinancing, and other types of general consumer borrowing, and has proven fairly successful.

These types of investments are regulated primarily on a state-by-state basis. Although they’re an interesting alternative to other types of investment, I don’t find them particularly exciting. Instead, I’d like to highlight two startups in the crowdfunding space which I am incredibly excited about, Fundrise and Solar Mosaic.

When discussing Kickstarter, I explained that I invest because I believe the world will be moderately improved if the thing I’m backing exists. In much the same way, both Fundrise and Solar Mosaic provide the opportunity to invest in the creation of a thing – a building in the case of Fundrise, a solar installation in the case of Solar Mosaic.

Both projects offer somewhat similar narratives. They aim to fund things which require large initial capital investments, and offer relatively predictable returns over a fixed period of time. And both projects aim let you “do good” in your community, without having to repress your capitalistic urges entirely.

Solar installations offer a fairly straightforward business proposition. After the initial installation, solar panels produce power at a relatively predictable rate, which can be sold back into the power grid or directly to a customer. Rather than seeking to fund massive generating plants in the desert, Solar Mosaic targets rooftop or other localized solar installs. This type of installation provides a tangible, visible form of renewable energy production directly within communities. By investing via Solar Mosaic, investors have the opportunity to see their investment take a shape, while also generating a reasonable return.

Solar Mosaic is currently limited to small investors in California and New York, as well as accredited investors anywhere. As the SEC sorts out the implementation of the JOBS act, that’s likely to change. They’ve recently moved out of beta and seem to be “going vertical.”

While Solar Mosaic is interesting and exciting, Fundrise falls into the category of please take my money now – I think it’s absolutely brilliant. For a fantastic breakdown of the process which lead to the creation of Fundrise, and the current legal status, check out this in-depth article from The Atlantic Cities. I’d like to offer my own interpretation, as I see Fundrise as a solution to a problem I’ve identified in the past, but never been able to articulate.

I’ve often been confused by the presence of large numbers of abandoned, dillapidated buildings right in the heart of cities with sky-high property values. How can property sit vacant in a place like San Francisco or Washington DC?

When you dig a bit deeper though, it becomes clear that you’re dealing with a classic “bootstrapping” problem. The value of land is so high that the value of the building becomes relatively insignificant. A piece of land with a cat-infested, burned-out shell of a building may only cost marginally less than a piece of land with a mixed use retail structure. Investors therefore have little incentive to take on the risk and complexity of buying and rehab-ing the “ugly” property.

In cities with lower property values, non-profits, foundations or neighbor-revitalization groups might step in to renovate a property. But, when the cost of entry is in the millions or tens of millions of dollars range, even the most well-heeled foundation can only have limited impact.

Fundrise circumvents this problem by seeking investment from individual community members or others interested in revitalization. Collectively, the investors purchase the property and fund the renovation or construction. The property is then leased to a preselected tenant or tenants. Investors are then repaid via rent paid by the tenant, as well as the increase in the value of the property.

While it doesn’t make sense in all cities (including, very likely, my own), I consider this a potentially transformative solution to a vexing problem.

Taking a step back, it’s worth asking whether all of these crowdfunding and person-to-person lending platforms represent a meaningful “alternative” to traditional investing, or whether they simply supplement the standard vehicles.

Much has been written about Gen Y being scared of investing due to the fallout from the financial bubble bursting. Thirty-somethings are leaving their money tucked under mattresses or in low-yield (essentially no-yield) savings accounts.

As a certified thirty-something, I don’t share these fears. However, I’m also a person who values rationality. I want to invest in a company based on a belief that the company has a bright future. Should that belief prove accurate, I’d like to see my investment grow. Over the long term, that may still be the way the markets behave, but the degree of irrationality over the last five years has shaken my confidence. A political party willing to risk government default combined with an incredibly unclear global economic outlook means that investing feels far more like rolling a dice than it did even ten years ago.

Solar Mosaic, Fundrise, and a whole raft of other companies in this space provide an opportunity to see your investment take shape on a community level, and to know that it will succeed or fail based on far more localized, micro-economic variables. They’re not risk-free by any stretch, but at least if they fail you can take solace in the fact that they’ll feel very bad about it.