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WCO News Magazine, Issue 2/2023, No. 101

By answering just 17 questions in a single-choice format, you help the blockchain community further shape the path to the blockchain era. Based on a scientific study, key challenges have already been identified and these now need to be validated by practice. The answers to the questions are anonymous and do not allow any conclusions to be drawn about the person. Whether beginners, advanced users or experts – blockchain-interested people of all experience levels from companies and research are asked here.

The survey provides the basis for identifying the main challenges when it comes to using Blockchain technology. On this basis, suitable solutions can then be found and made available to the community free of charge.

Click here for the survey

Blockchain superhero LedgerMan comes to the aid of Willy the customs official. He optimizes the complex paper-based processes and avoids Mr. Smuggle forging papers. With the enormous volumes of goods being handled in container ports every day, digital support is simply needed. Mr. Smuggle doesn’t stand a chance and Willy is less stressed.

Comic isn’t a reality? Of course, blockchain technology cannot be introduced ad hoc at Europe’s largest container port, and processes are not magically digitized – but our comic book story is not that far removed from reality. The Customs & Blockchain Working Group meets four times a year on the road to end-to-end digital customs processing based on blockchain technology. Step by step, the vision is being implemented together. Last but not least, the open source offerings of Blockchain Europe also support this process.

Following the big picture of our research location, the platform economy is the central enabler of flexible supply chain planning. Through platforms, the different actors within a supply chain come together and rely on blockchain-based certification, payment and transaction negotiation. Blockchain Europe Advisory Board member Prof. Dr. Fritz Henglein from the University of Copenhagen will reveal exactly how this can look in his presentations “Total Accounting for the Circular Economy” and “Smart Financial Instruments and Capital Market Platforms”.

In addition to insights into the platform economy, central analysis methods and the topic of sustainability in global networks, the live case study will again be offered. The already published open source components of Blockchain Europe and the Silicon Economy will play a central role. In cooperation with the Open Logistics Foundation, the participants of the Summer School will ask themselves what other open source components will be needed in the future to organize supply chains flexibly and sustainably via platforms.

Registration for the Summer School is now open. If you don’t want to miss a week full of concentrated logistics knowledge, the direct transfer of science into practice and the opportunity to build a comprehensive PhD network, you should register quickly. Due to Corona, only 20 places are available this year.

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When it comes to Blockchain, his motto is: Let´s get started, even if we think we are only 90 percent ready. He gives us an insight into the prospects of Blockchain.

What drives you in your day-to-day work with the blockchain technology?

Bringing Blockchain and DLT faster into real life business processes and industrial applications. Pushing use cases and proof of concepts into MVPs and scalable solutions with a clear business impact. Contributing to these goals, in Germany and Europe, using the time window we have for this and not leaving the field completely to others, is what drives me every day – together with my colleagues at Fraunhofer and partners from politics, business, and science,

What challenges and opportunities do you see in digitalization and blockchain?

We are currently experiencing first-hand the negative impacts of dependencies in global supply chains.  At the same time, we are dealing with increasing pressure to make our Supply Chains more sustainable. If we want to reduce dependencies and become more sustainable, we need technology leadership to go digital.

In Europe we have not been successful and fast enough with digital business models in the B2C sector. Large platform providers from other regions are dominating the market and setting the standards. In the B2B sector however, Europe – and especially Germany – still has many opportunities. With our strong machinery, automotive, pharmaceutical, chemical and logistics industries and with the innovative SME sector we are still in a position to achieve digital leadership. But we must take advantage of our window of opportunity before it closes. We must act now.

We should therefore aim for technology leadership in Germany and Europe in the field of blockchain – what does it take to achieve this?

Blockchain and DLT still have to deliver on the `proof of concept’ in many areas. Deployable minimal viable products are still the exception. The time to exploit these opportunities is now. And I am not saying that Blockchain will be the solution to every problem. But we need to overcome the `chicken-and-egg´ situation we are in. For that we cannot wait until all questions regarding legal security and economic viability have been clarified, until all security risks have been investigated and, until all standards have been established. The last 10 percent to perfection will cost us 90 percent of the effort and valuable time. Time, we don’t have if we want technology leadership. If we want to create and apply future digital business models ourselves instead of limiting ourselves to the role of supplier and consumer.

Seems like we need to act now?

We need to get started now, not tomorrow, not next quarter, and not next year. Even if we don’t know the exact outcome or the exact cost-benefit ratio yet. Even if risks remain, and we don’t know whether it will work or which parts ultimately will work.

Our EnterpriseLab partners Commerzbank, Rhenus, Telekom and others are already taking this path, investing into proof of concepts. Also, some of our medium-sized partners such as Piel (technical wholesale), EJOT (automotive & construction) and the Kronhardt brothers (tunnel construction) are developing and testing blockchain-based solutions with us. Further support will be coming with the open-source solutions we develop in `Blockchain Europe´ and in the ‘Silicon Economy´ Initiative – both anchored here at the Fraunhofer IML in Dortmund.

Blockchain Europe: You hold the title “Communication and Community Management” in the Blockchain Europe project, what challenges do you face in your job?

Britta Scherer: The topic of blockchain is difficult to understand. In addition, I always say that the community is divided into so-called “blockchain evangelists” and “blockchain agnostics”. Outside the community, there are many, at least in Germany, who have never heard of the technology. So the challenge is to present the technology and its possible applications in a simple, clear, and understandable way, and to appeal to both the newbies and the nerds.

Blockchain Europe: How can you master this challenge?

Britta Scherer: That’s a good question! Many roads lead to Rome. But what always helps is visual language and breaking down what is sometimes highly scientific content.

For example, I have launched the ” inner cinema” strategy. If we ask our parents, grandparents, neighbors or even friends or children, ultimately very few of them understand the latest technologies. This also applies to older “new” technologies, by the way. But if we take a look at artificial intelligence, it seems that everyone can relate to it. One thinks of various movies, human-like robots or smart houses. So you have an image directly in your head and therefore the technology is no longer so foreign to you, even though hardly anyone knows the scientific and technological connections. I would like to create that for blockchain technology as well.

LedgerMan is the beginning. The blockchain superhero in comic format takes us on his adventures and in the process we learn about the application of blockchain. These are not cinema films, but they give a simple introduction to the topic, are suitable for young and old, and for beginners and advanced users.

Blockchain Europe: Since the release of the animated films, do your parents understand what you do and what Blockchain is?

Britta Scherer: (Laughs). No, but they have a rough idea of what the technology can do and is needed for. My nephews are eagerly awaiting the next season, my colleagues have a lot ideas for new episodes, and our community is happy to accompany the superhero on new adventures. It’s not possible to implement inner cinema that quickly, but the start has been made.

Blockchain Europe: Why a comic?

Britta Scherer: Like many digitization or IT topics, blockchain is difficult to illustrate visually – compounded by the pandemic, for over two years I’ve been unable to take photos of real-life appointments or demonstrators. Boring decorative images with futuristic backgrounds and ones and zeros in the foreground or the chain symbol popular in the case of Blockchain are rarely eye-catchers. So we created our own visual language and graphic world. Apart from that, no other activity can really pick up all the different target groups the way a comic can. If you think in terms of categories – and I’m allowed to say this because I’m one myself – nerds love comics. That’s why the comic book was published authentically sealed in the Original Collector’s Edition – for collector’s value. And it’s not just kids who love animated movies. The reasons why The Simpsons or The Minions are so popular with adults, too, are the hidden jokes and hints – the reference to real events. In a comic, the world is also allowed to be black and white sometimes, and a bit of humor can be added.

Blockchain Europe: A comic and the accompanying animated films are a very work-intensive undertaking. Are there other ways to communicate the topic of blockchain?

Britta Scherer: The topic, just like all other scientific topics, lends itself to most classic measures. If we take a look at physics or mechanical engineering, the topics there are also not more difficult, easier or more specialized.

Basically, videos help. Here, several senses are addressed at once, the concrete object of work can be shown and the community can get to know the people behind it. Events are also a very important tool. People need to be able to exchange ideas, learn from the experiences of others and share their opinions.

Sometimes it also helps to go against common prejudices. For example, we launched our “Fake News” campaign. Various prejudices and myths about blockchain technology are circulating on the Internet in particular, and these have also manifested themselves in the minds of some people in a very persistent way. Therefore, we have cleared up some prejudices in short and factual texts.

Blockchain Europe: What else can the blockchain community expect in the next time?

Britta Scherer: Exciting events. Our blockchain practitioner, blended learning format, is starting its second round and our meet-up series continues in April. Our whitepaper series will be published. And, minor spoiler: The second season of LedgerMan launches on March 24. Last but not least, there is new content in our “Projects” section on the Blockchain Europe website. We will present more implementation projects from the community. In line with this, there will also be many videos on our YouTube channel again.

How much time is involved in the process itself and in the individual sub-steps? What are the most common problems and their effects? What measures would simplify your day-to-day work? Are regulations, laws and specifications known? These and other questions await you in our short survey. The results will be evaluated and shared with the community free of charge. In addition, Blockchain Europe will work on possible digitalization, simplification and support offers.

The data will be used in anonymized form, so that it is impossible to draw conclusions about the participating person or company. Participation is open until April 15, 2022.

Click here for the survey

No. 6
Blockchain is insecure!

Benjamin Franklin once said, “nothing in this world is certain except death and taxes.” He was right about that. After all, no technology in the world and no system will ever be 100 percent secure. But the fact is, blockchain technology and the principle behind it have not yet been hacked. Blockchain relies on decentralization, i.e. distributed structures, which means that hacker attacks can be securely warded off. Transactions are constantly checked by the entire network, so attacks on the blockchain are improbable. A hacker who wanted to change a network based on blockchain technology would have to hack the majority (at least 51 to 75 percent) of the nodes involved in the network. Only then would the attack have the potential to succeed.

However, the fact that blockchain technology is fundamentally secure does not mean that all services, applications or nodes linked to the blockchain are also automatically secure. It is not without reason that the community talks about 95 percent of problems being located in front of the computer. If a network participant does not secure his computer or else the device he uses to write on the blockchain, a hacker has the opportunity to access data. Digital identities can be stolen. This initially gives the hacker the same rights and access to the Blockchain as the original user. Which rights these are in detail (read, write) is determined by the authorization module.

There are different mechanisms that can quickly identify and stop such an attack. For example, the so-called plausibility check is used. If the behavior of the node does not correspond to the behavior in past transactions and activities, the participant is excluded from the network. Since the blockchain consists of blocks that build on each other and all transactions can be tracked at any time in the history, the hacking activities are quickly identified and can be cancelled.
Thus, two-thirds of all participants in the network would have to disregard their IT security, be hacked at the same time before, for example, the plausibility check detects deviations, further protective mechanisms would have to be bypassed, and only then could an attack become potentially dangerous for the blockchain network. Overall, blockchain technology is very secure and successful attacks are improbable.

“Our goal is joint, end-to-end digital customs processing,” explains Tobias Jornitz from the Blockchain Europe project. As founder of the Working Group Customs and Blockchain, he wants to create a forum for customs experts to shape the future together in the spirit of open innovation. “The working group contributes to the networking of foreign trade and blockchain professionals, enables an exchange on current and future challenges and creates a European vision for customs clearance.”

To this end, the Customs and Blockchain Working Group meets quarterly and gives its members space to openly and proactively share thoughts, discuss ideas and elaborate on topics with experts from other industries. After an initial identification of common “pain points” and discussion of possible solutions using blockchain technology, so-called “focus groups” are now also emerging – small groups that dedicate themselves to a specific issue between official meetings in order to subsequently present their elaborations to the larger group. In this way, the Working Group is taking advantage of its special position at the interface between foreign trade and blockchain technology.

The current 24 members include 17 companies (two from the UK), academic institutions and government agencies. The Working Group is open to other interested parties. Expressions of interest are available via the Blockchain Europe website. The next regular meeting will be held in January 2022.

Want to be part of Woking Group? Register here.

The members of the advisory board will now highlight issues and project plans from science and business twice a year and bring both perspectives together. In addition, the focus is on expanding the blockchain network in NRW, Germany and Europe. The first meeting took place in October 2021.

“With the establishment of the advisory board, we want to align our blockchain research even closer to the needs and requirements of the economy and at the same time network even more strongly in science – also internationally. After all, many topics related to blockchain technology require international solutions to help them achieve a breakthrough,” explains Prof. Michael Henke, Institute Director at Fraunhofer IML.

Minister of Economics and Digital Prof. Dr. Andreas Pinkwart: “Blockchain technology is an important foundation for the digitalization of our economy. Only with blockchain does the Internet of Things become an Internet of Values. The high-caliber composition of the advisory board with blockchain experts from Germany and other European countries underscores the importance of the ‘Blockchain Europe’ project.”

At the beginning of 2021, Fraunhofer IML had already launched the first international scientific cooperation on blockchain research in order to also meet the requirements from other countries and thus pave the way for blockchain technology throughout Europe. With Windesheim University of Applied Sciences in the Netherlands, the scientists have since been conducting joint research around topics such as customs or dangerous goods processing, which can be made tamper-proof using blockchain technology. With the Polytechnico di Milano (Polimi), the University of Copenhagen, the Zaragoza Logistics Center (ZLC) and SettleMint from Belgium, four more international partners have now joined.

At the European Blockchain Institute in NRW, Fraunhofer IML, the Fraunhofer Institute for Software and Systems Engineering ISST, and the Chairs of Corporate Logistics and of Materials Handling and Warehousing at the Technical University of Dortmund are to decisively advance blockchain technology. The Ministry of Economic Affairs, Innovation, Digitalization and Energy of the state of North Rhine-Westphalia has been funding the project with around 7.7 million euros since May 2020.

The members of the Blockchain Advisory Board at a glance:

Petra Bögle (DACHSER SE)
Prof. Dr. Dagmar Gesmann-Nuissl (Technische Universität Chemnitz)
Florian Glatz (Blockchain Bundesverband e.V.)
Stefan Günther (SettleMint NV, BEL)
Prof. Dr. Fritz Henglein (Universität Kopenhagen, DK)
Dr. Armin Knors (Bayer AG)
Jon Kuiper (Alliance for Logistics Innovation through Collaboration in Europe (ALICE))
Dr. Ulrich Lison (AEB SE)
Iris Plöger (Bundesverband der Deutschen Industrie e.V.)
Prof. Wolfgang Prinz, PhD (RWTH Aachen/Fraunhofer FIT)
Prof. Dr. Philipp Sandner (Frankfurt School of Finance & Management)
Prof. Dr. Michiel Steeman (Windesheim University of Applied Sciences, NL)