Germany has been known for quite some time as a global leader in terms of countries that are truly going green. All the way back in 2008, Germany was reportedly generating 14.2% of all of its electricity from entirely renewable sources. In the last few years, they have added a new form of evidence to their status as a progressive country. In a more specific sense, what we mean by this is the fact that they have emerged as a sort of leader in terms of accepting new technologies like the Blockchain, as well.
Now, they have effectively combined the two, which can be seen in the example of Lition that is a licensed energy company in Germany, built on the Blockchain. If you look at how much trouble Blockchain and Crypto firms are currently having in terms of being taken seriously enough to be legal and able to be regulated, then you will realize how striking this is. Not only is Lition able to legally do business in the energy market in one of the world’s most economically successful companies, they have actually been gaining transaction as of late. According to a Coindesk piece on the subject that was released today, this has amounted to gaining clients in 12 German cities in less than a year, which include Berlin, Hamburg and Munich, that many consider to be the most powerful cities in the country.
Included in this growth is the fact that the company now reportedly has 700 clients, on a household by household basis. If you are wondering at this point what Lition’s differentiator is that is allowing it grow at this rate, it all starts with the basic principle of decentralization. On a more detailed level, this means that Lition connects households directly with an energy provider, which in this case is them, in order to cut the costs of supplying and using this energy at the same time. The reasoning behind this is that the accepted norm in the energy industry today is for smaller renewable energy producers to sell their energy to large global power companies. These large companies then re-sell the energy to consumers or households. What appears to be a more specific case of this in practice is that of trading in RECs or Renewable Energy Certificates.
If this is taken as the accepted industry practice with regards to renewable energy, then we can confidently add that the large companies are probably making a killing off of this process. If they were not doing so, then it would be logical to wonder what the incentive would be in a business context for buying this energy. Because all of this can be logically hypothesized as true, then a strong case can be made for a company like Lition to cut into this market share that these industry giants are generating.
What can call such a product like Lition is a “distributed energy exchange.” Consumers and producers agree on a price and exchange a real amount of energy that has actually been produced. In this case, the energy in question is solar. One of the most unique features about such an exchange is that it also needs no human involvement in terms of recognizing when a payment has been sent and authorizing the exchange of a product because of this. In other words, smart contracts rule the entire process. Users send Euros for the energy they want and the system automatically converts this to Ether to send to its central smart contract. Once the contract receives the Ether, it then automatically sends the energy to the respective user. Because of the same public and private key infrastructure that runs almost every Blockchain-related project, it is able to quickly identify what user needs this energy, based on the public and private keys attached to each payment.
In that Lition plans to ICO sometime later this year, it will be interesting to see how doing so might scale their offering in a global sense, since they have aspirations to go far beyond the energy market and become what they call “the Blockchain Standard for business.”
By: BGN Editorial Staff