From Hype to reality: "LogCoin" makes smart contracts possible
The crypto currency "LogCoin" which is based on the blockchain technology should enable the conclusion of smart contracts in logistics. The start-up LedgerEngineers – a Fraunhofer IML spin-off – has been pushing this ahead for some time on the basis of the research in the institute, however, in the B2C area. CFO and Co-Founder Natalia Broza-Abut talks about the origins and objectives of the young company to make logistics more digital with "LogCoin" – and the commitment to the European Blockchain Institute.
Blockchain technology is one of the greatest innovations since the development of the World Wide Web. It is on its way from hype to reality, not least with "LogCoin". Today, not only corporations and large companies, but also SMEs are offered numerous application potentials and therefore the respective added value.
Of course, "Bitcoin" is still the best known example for the exchange of crypto currencies based on the block chain technology. As of 2009, the appropriate applications were used for the first time. Today, "Bitcoin" is regarded as "Blockchain 1.0" in science – in accordance to the development of the Internet. The second development stage includes commercial and financial applications that go beyond pure cash transactions. It is known as "Blockchain 2.0". Blockchain applications of this stage already use so-called "smart contracts". In the meantime, however, science has reached another stage: applications with no direct connection to finances run under the term "Blockchain 3.0". This is about decentralized, autonomous organizational units - intelligent technical systems, machines and robots - interacting on the basis of joint smart contracts. This is exactly where the crypto currency "LogCoin" comes into play which is further developed by the start-up LedgerEngineers and Fraunhofer IML– now also in the context of the European Blockchain Institute.
Success factor balancing capability
Crypto currencies are actually the original innovation trigger for the rapid development of blockchain technology. Today, more and more currencies enter the market – hoping to build on Bitcoin’s success. These new currencies promise elevating functionalities or cross-blockchain payments. Although bigger companies accept bitcoin payments, crypto currencies continue to remain primarily a means of speculation. This is mainly due to a lack of general adaption, the high complexity of the system, but also the volatility of current currencies and the missing balancing capability. "LogCoin", however, is a currency that can be used for accounting purposes and that can be also used for processing micro payments.
From currency to platform
The development of "LogCoin" goes back to the research work in the "Procurement & Finances in Supply Chain Management" department at Fraunhofer IML. As a Fraunhofer IML spin-off, the start-up LedgerEngineers had begun to use "LogCoin" for the B2C area – e.g. for private sales. In the development process, this basic idea, however, gave way to the awareness that there is much more potential in the B2B area. In the meantime, the LogCoin platform, a blockchain-based sharing economy platform for logistics, is within reach.
Via blockchain a complete monitoring of transactions in real time is possible. All players are supported in monitoring the execution of contracts, business processes are automatically initiated and bookable assets are exchanged via the "LogCoin" token network. Thanks to the smart contract technology, invoicing and its processing is simple. Moreover, shipping companies, banks and providers can initiate follow-up processes in an automated way. The technology works across companies and for the entire supply chain network.
ABOUT THE AUTHOR
Natalia Broza-Abut is scientific employee at Fraunhofer Institute for Material Flow and Logistics IML and CFO and founding member of LedgerEngineers.
MORE ABOUT THE TOPIC
The blockchain technology offers considerable potential for optimizing business processes. The "Blockchain and Smart Contracts: efficient and secure supply chain networks" whitepaper presents the basics of the technology and demonstrates how and why certain use cases and business processes can particularly benefit from that. Special attention is given to the use in supply chain management and the financial industry. The whitepaper is published in the "Future Challenges in Logistics and Supply Chain Management" series of Fraunhofer IML.