The concept of smart grid infrastructure is already being implemented and progressing rapidly. The number of countries are transforming the traditional power grid so that it will be able to maintain the smart grid requirements. Smart grid is known as an evolutionary power grid which is proposed to make intelligent decisions on its own based on a current state of electrical power system. Microgrid (MG) is a "building block" of smart grid which supposed to provide wider control capability into the system, thus allowing to operate without connection to the grid. However, the remote and autonomous control of the smart grid may result in problems related to security. The main purpose of this paper is to consider various application scenarios of the Blockchain technology in smart grid. The utmost example is smart contract feature. It allows to reduce cost and increase security of trading operations without including third parties. In other words, direct communication between seller and consumer is implemented. Particularly, paper explain how the security and resilience of the system can be improved by the application of Blockchain technology. Furthermore, decentralized machine-to-machine interaction scheme is proposed. First of all, auction based electricity trading platform is established in Jade platform, and further on electricity trading history is stored in blockchain. The proposed case study shows implementation possibility of smart contracts in smart grid environment.