Bart, Ilhan & Max

Blockchain beyond the hype

At Rotterdam-based BlockLab it’s all about turning blockchain technology into practice. Promising collaborations with renowned parties involved in harbor logistics and energy should make blockchain visible to the public.

A little more than a year ago BlockLab was founded by the Rotterdam Port Authority and the city of Rotterdam. This was just before the blockchain hype, mainly caused by the craziness around altcoins such as bitcoin, reached its peak. ‘Of course, we’ve benefited from this attention’, says Aljosja Beije (46), logistics lead at BlockLab. ‘It also led to all kind of wild tales. Blockchain would even bring us world peace.’ According to Beije, an important explanation for the many awkward ideas is that the technology is still in its infancy. ‘It is very important to find out what blockchain can and cannot do.’

BlockLab focuses its activities on the energy and logistics sector. This is no random choice, as the largest port in Europe is in the city’s backyard. The small company operates as a field lab. This means it’s investing in two things: community and platform building and the development of uses cases. The latter is always in collaboration with a consortium of companies. ‘We’re not an ordinary software company’, Beije states. ‘Our goal is to develop really cool applications, beneficial to both port and city. Not just for a single client.’

Prototyping

The start-up had a head start. Beije, who has a long track record in international logistics, has been involved in blockchain since 2013. Currently, he’s conducting a PhD research project at Politecnico di Milano on the impact of the technology on supply chain management objectives. His BlockLab partner Janjoost Jullens knows all about what’s happening in the creative vanguard and how to connect people and organizations.

So far, both men celebrated a number of successes. One of them concerns the working blockchain prototypes they presented last spring for a rapidly changing energy market, developed by four consortia. Two are now working on their minimal viable products which are expected to be presented by the end of this year. All projects are made possible via the Small Business Innovation Research tender (SBIR).

Applying blockchain in the energy market was a more than logical step, according to Jullens, energy lead at BlockLab. Especially because it’s becoming less likely that our electricity will come from a sole power station in the near future. ‘The energy market is becoming more and more decentralized. Think of wind farms, solar panels on rooftops, windmills on farmer’s land. When many new parties close transactions and exchange data, the use of this technology is obvious.’

Same goes for the logistics side, since logistical chains are usually very decentralized. ‘To get a container from China to Rotterdam, sometimes you have to deal with forty parties’, says Beije. ‘No one has a really dominant position. So, how do you ensure that companies work together and trust each other?’ The company worked on three proof-of-concepts in 2017 and two business cases this year.

Common problems

Blockchain is extremely suitable for transferring assets to a new owner under certain conditions and in a safe manner, both men state. In logistics this can be helpful when there’s no dominant party involved, like Heineken, Adidas or Nike. These companies are known to unilaterally impose their way of handling goods upon others. It’s how they structure the logistical chain. However, most chains consist of a large number of SME companies. Beije: ‘For the majority of them it’s very difficult to be innovative. There’s is a lack of knowledge, expertise, but above all: money. With BlockLab we want to make innovation possible, by defining a common problem and then solve it together.’  

Seven people currently work at BlockLab, five of whom are developers. Including employees of partnering companies, about fifteen people are developing blockchain applications. Their number is likely to increase, given the promising projects announced on October 19. It concerned the launch of two virtual labs and two business cases involving several multinationals.

Aljosja Beije

Two business cases

In the first business case South Korean tech juggernaut Samsung and Dutch bank ABN Amro collaborate. Subject is the end-to-end supply chain visibility. Samsung wants to monitor and learn from how their products are shipped around the world in containers, while ownership is transferred. ABN is interested in who’s handling these goods and who are additionally involved. The bank tries to find out how it can finance and insure freight more competitively. Beije: ‘Samsung doesn’t require ABN to finance its trade. What they share is the belief that blockchain can offer solutions.’

Same goes for the business case regarding energy. ‘It concerns building an online marketplace for locally produced energy and flexible demand and supply. Households and companies will be able to trade with each other, explains Janjoost Jullens. The pilot revolves around stimulating flexibility in a market that is highly susceptible to change and to absorb peaks and dips in the energy grid. The use case is a collaboration with the international information broker S&P Platts. ‘They have a huge knowledge position and know how to smartly organize the market’, he says.

Virtual labs

Next to developing use cases, BlockLab stimulates research and the blockchain community. That’s why it has launched a virtual energy lab. It provides an open source data platform for other parties to experiment on. BlockLab is taking care of the blockchain infrastructure. The first application is about redirecting measurement data from several hundred smart meters to the platform. Jullens: ‘Interested parties can run their applications on this live data.’ A suitable location is being sought for in the port. The virtual logistics lab, a collaboration with TU Delft, TNO and Dinalog, is soon to launch.

BlockLab is very hopeful that blockchain will catch on in Europe’s biggest port. But before this can happen, the familiarity with technology has to grow and simple solutions to existing problems must be found. These two factors are likely to pave the way for further developments, such as the integration with the internet of things and machine learning.

‘I hope people eventually end up in Rotterdam when they search online for blockchain plus logistics or energy’, says Beije. ‘That we will draw the interest of startups and companies that really want to experiment. Because they know it’s happening here, in more fields than blockchain alone.’