The year 2018 has been marked by a rapidly increasing interest in blockchain technology and its potential benefits to a wide array of different industries. The market was thriving, which allowed the overall funding acquired by blockchain projects to reach unexpected highs. In the first half of 2018 alone, close to 6B USD were acquired by blockchain startups. The average success rate of ICOs stood at almost 50%, a mind blowing number that we will never witness again in the now matured state of the ICO market.
One of the many unique perks of blockchain technology is its ability to disrupt industries plagued by inefficient or dubious practices, with the financial sector being the universal example of where blockchain could bring much needed changes. New startups across hundreds of industries were quick to spot the application of the technology to virtually every sector.
The energy industry was no exception – blockchain-based projects in late 2017 and early 2018 such as WePower ($40M), RestartEnergy ($30M), EnergiToken ($15M) successfully completed their token sales by hitting their soft and / or hard caps. Many other projects since then managed to at least partially achieve their funding goals by proposing their own ambitious solutions for some of the most pressing issues of the energy industry.
However, since May of 2018 the ICO market has been on a steep downfall. The number of new ICO projects was ever rising, but the funding acquired by them plunged dramatically. The market matured, over 90% of all ICOs failed to deliver the promised products and the investors became extremely sceptical.
The white line represents the number of ICO projects, the yellow the total funding acquired by all of the projects. As we can see, the gap between the number of projects and their funding is widening rapidly,
We can’t help but ask ourselves about the reasons behind this reality. The answer was simple – most projects were startups founded a few days ago and had nothing but an idea and a website. Rarely was there even a prototype. A whitepaper was everything that promised the development of their projects to their investors – and in most cases it was all that remained at the end.
The energy industry had its fair share of projects that remained an idea on a blank piece of paper – even most of those that managed to acquire the highest funding. There are also additional reasons to this – considering that the energy market requires substantial capital investments, technical infrastructure and companies are forced to cope with strict regulations, creating a sustainable solution in that specific industry is close to impossible for a newly founded company.
Luckily, this year we are about to face an exception – an existing energy company with 11 years of experience is entering the blockchain market and has the resources to become the first electricity provider to adopt the disruptive technology for its traditional operations.
LCG Energy – over 10 years of experience on the energy market
LCG Energy is a licensed reseller of electricity and energy contractor serving more than 50,000 clients in Germany and Austria, with its headquarters in the Netherlands and subsidiaries in the UK, Hungary, and Gibraltar. Since its foundation in 2008, the company has managed to achieve an outstanding financial performance every year. With a revenue of over 20M EUR in 2018 and a forecasted revenue of up to 90M EUR in 2019, the company is well positioned to launch its own blockchain initiative.
The reasons why newly founded blockchain projects in the energy industry fail are mainly due to their lack of an established technical infrastructure and have a network of strong industry partners. Another reason that has proven to be even more challenging for them is the requirement to acquire licenses in the jurisdictions they want to be active in. These licenses can only be obtained through a lengthy and strict due-diligence process that can last years.
As a licensed energy company by the German and Austrian state Federal Network Agencies for Electricity, Gas, Telecommunications, Posts and Railway, LCG Energy removes these entry barriers most newly founded company on the blockchain market clash with. Its existing customer base and partner network of over 1000 providers of energy-related services are reinforcing the foundations for its successful launch of their blockchain initiative.
Existing technical infrastructure
Building a technical infrastructure in the energy industry requires enormous capital investments that exceed the funding acquired by any of the projects on the blockchain market by a substantial margin. Luckily, LCG Energy has already established the needed infrastructure for their operations and has been operating for more than 10 years. As a result, the company has been able to even go a step further – during the last 3 years LCG energy has been installing Smart Meters, an innovative technology that allows consumers to have a fully transparent overview of their energy usage.
In its most basic form, a smart meter is an electrical meter that measures the energy consumption of a household or a facility. Smart Meters transmit the information to a datapoint automatically and remove the need for manual readings. At the same time, the consumer has the historical information about their consumption – unbiased and true – available at any point.
Smart Meters remove the informational asymmetries between energy providers and consumers and ultimately adopt a disrupting role – and even more so when integrated with blockchain technology. Over the last 2 years, the technical team of LCG Energy has been researching the possibilities of blockchain integration to their Smart Meters and has concluded that the synergy effects will lead to a close-to-perfect situation in terms of unbiased exchange of information between the company and the end consumer.
The LCG Energy ICO
LCG Energy is currently running its private sale, offering a special bonus for investors. Crucially, 80% of the funding acquired through LCG tokens will be used by the company to purchase energy on the wholesale market at the best prices using the proceeds from the token offering, resulting in at least 20% better prices for its customers.
The company’s vast expertise in the field, their large partner network, strong legal backbone acquired through licensing and their already established technical infrastructure is currently unmatched on the blockchain market.
Learn more about the LCG Energy project on https://lcg-group.de/
Disclosure: This is a sponsored press release