Lition has clients in 12 major cities
Lition, which is a little-known Ethereum project, is quietly helping real German citizens to find cheaper energy. It has been launched earlier in 2018, and it is already a licensed energy supplier in German with clients in 12 major cities, which include Berlin, Hamburg, a well as Munich, which uses its decentralized energy market. The Lition market is built on the top of the Ethereum or ETH blockchain, and it connects consumers directly with energy producers, small and big.
Totally, more than 700 households across Germany now utilize the decentralized platform, to buy their energy, according to the saying of the company.
Shortly, Lition tries to change how global energy works with a concept which is very familiar to blockchain enthusiasts: bypassing unnecessary representatives, as well as saving its users money on electricity.
When we talk about the households, an energy supplier actually sells the solar or electric energy to an intermediary, usually giant, as well as multinational company. Then, customers can buy energy from that intermediary.
The problem actually is that in the eyes of the CEO of Lition, named Richard Lohwasser, such multinational intermediaries, have a lot of influence, and they do not give users enough choice in what kind of energy they can actually buy.
So, the solution of Lition is to cut them out entirely. He stated that their energy exchange connects customers, as well as producers directly. In fact, producers put their energy on the exchange and then customers can buy it.
He added that often, buying directly from the producers is limited to energy suppliers who are big corporations. They are also bringing the exchange to the consumer, so consumers can actually pay for the energy which they want.
Users will have to be German, for now
Slicing out the middleman can also cut costs, and that will not be by a minuscule amount either. As Lition said, this is going to save customers an average of 20% on their utility bills, as well as increase power plant revenue by up to 30%.
That is although Lition has a strong emphasis on ‘green energy,’ which while is better for the environment, it is usually more expensive. As the demo app shows, the users of Lition can choose from the categories of wind, solar or biomass, then they can choose which provider they like the best.
When a user finds the energy which they want to buy, they can actually make a payment in euros to Lition. Behind the scenes, an ETH smart contract will detect this payment and automatically send the customer their energy.
The website of Lition explained that their blockchain technology actually describes the process of buying energy right from green producers of any scale, by employing transparent smart contracts which permit users to circumvent all of the complexity of power distribution brokers.
For now, the users will have to be from Germany, where Lition is actually licensed to operate. Those that are, in fact, interested in buying energy with the use of the market of Lition can query on the Lition website, which also features a price estimator which is based on the postal code of the user.
But, Lohwasser actually sees all of this as a proof-of-concept for a bigger goal. Probably, one day, anyone is going to have the ability to buy energy directly in this decentralized fashion, maybe even from tiny solar farms which are set up by hobbyists in a neighborhood nearby.
The bad news actually is that, just like other companies, they also have had problems with ETH. Lohwasser also expressed his opinion, saying that ETH is not a good system at all.
As much as he comprehends that the platform is actually open and permissionless, which means that anyone can use it without any filing of a permission slip, he actually rattled off a long list of problems that the users of Lition have faced.
Lition plans to launch its own ICO
It is very slow. It actually takes about 20 to 30 seconds to tell a customer whether they can buy energy or not, said the CEO, adding that as a company which is trying to promote renewable energy, they actually start to feel uneasy about the use of a system which relies on mining and which is rather an energy-sucking process.
Realizing all of the high costs which are connected with the platform actually put Lition in a bit of a bind. They also started a hunt for something even better, but looking at least at a dozen blockchains, they couldn’t find one which was both permissionless and scalable.
Lohwasser also said that all of them have their drawbacks. He seemed skeptical of the private blockchains, different from its public cousin in that not just anyone can participate. He also remarked that a person may not have a blockchain too.
So, they have also found partnering with one of the largest software companies in the world, SAP, to create their own system, a hybrid blockchain for an enterprise, which actually combines what they think are the best perspectives of private, as well as public blockchains. The SAP is also working on the smart contract layer, while Lition tackles the consensus layer.
The company is also keen to stress that they succeeded to create all of the technology without even funding via an initial coin offering or ICO. The new type of fundraising also enabled by blockchain technology is quite exciting, but it has also drawn quite a bit of skepticism, mainly as dubious projects could raise millions of dollars in such a way.
To pursue the private-public blockchain, as well as to be used for more than only energy use cases, Lition has some plans to launch their own ICO, to get it off the ground later this year.