Solving everyday business problems with ‘smart contracts’

Libertas Group has created an entire ecosystem for redefining the way we do business.
Image: Shutterstock

You may not have heard much of the Libertas Group, but that’s about to change.

Though just three years old, the company has developed its own blockchain called TSF, operates a 6 500m2 crypto mining operation based out of Bosnia and Herzegovina in Europe, launched a crypto exchange called Libex, offering more than 90 cryptocurrencies, and is a blockchain development company that is redefining the way we do business.

Libertas has applied for licensing under European laws, considered the most stringent in the world.

“A lot of business people have heard about blockchain and smart contracts, but have not yet been introduced to how these technologies can completely overhaul the way they do business, vastly improving efficiencies and slashing costs,” says Asif Aziz, chief technology officer at Libertas.

Case study

Aziz cites the example of Ammanah Islamic Financial Solutions, a Johannesburg-based insurer providing Shariah-compliant products and financial solutions.

The company was looking for a customer relationship management (CRM) system that would keep an accurate log of all interactions with short-term insurance customers, and manage its motor, household and asset insurance book.

“There are plenty CRM systems available in the market and a lot of them are good products,” says Aziz. “The problem is that when it comes to insurance, you have to interact with multiple service providers, such as third-party underwriters, and that introduces the potential for human error to enter the picture.

“We used smart contracts written on the TSF blockchain to eliminate the potential for error, and to streamline and reduce the claims process.

“This drastically reduced admin costs, and improved claims turnaround times for Ammanah.”

In the traditional claims process, there may be 10 or more steps involved, each requiring an intermediary in the form of an admin clerk, underwriter or claims manager.

For example, when an accident occurs and a claim is logged, the insurer may ask for photographic evidence of the accident. This would normally be taken by the claimant at the scene of the accident and then uploaded to the insurer’s claims desk. That can sit around for days before it is actioned. Then the insurer requests the third-party underwriter to assess the damage and who is liable – the claimant or the other party in the accident.

Eliminating errors

Smart contracts written on the blockchain eliminate this possibility. Each customer has a unique smart contract with information that cannot be altered, such as the make and model of car being insured, the insurance value, the customer’s ID, and – in the case of an accident – the police case number, and the date and a brief description of the accident, along with photographic evidence.

Using smart contracts to slash costs

Once customer information is logged on the blockchain, it cannot be altered, and all subsequent entries are similarly logged so that a complete audit trail of all interactions with that client is available forever after.

“Just think of the time and cost wastage in the traditional process,” says Libertas co-founder Yasin Hossenbocus. “Insurance is one sector that is going to be turned on its head by the type of technology we have developed, using the blockchain.”

Those familiar with cryptos will also be familiar with blockchain, which is an immutable ledger recording transactions in real time in a way that cannot be altered.

Bitcoin is just one example of the blockchain in action. Every bitcoin transaction since its inception 11 years ago is recorded in the Bitcoin blockchain, and is available to the public for inspection. The blockchain is decentralised, meaning it is stored on tens of thousands of computers around the world, all of which are updated constantly and in real time – which makes it immune to hacking or alteration.

Ammanah’s founder NM Habib says security of customer information and admin were the primary reasons for pursuing the blockchain solution with Libertas.

“We had a particular problem we wanted to solve and Libertas came up with a solution which was exactly what we needed, both in terms of security and cost savings.”

Like all smart contracts built on blockchain, these applications require a currency to perform transactions. The costs of these transactions, also known as ‘gas’ fees, are generally paid for in ether (ETH) for applications built on the Ethereum blockchain. Ethereum has attracted criticism for the high cost of these gas fees, prompting the network founders to build upgrades to improve transaction speed and reduce costs.

Libertas opted to develop its own coin, called TSF (Transaction Service Fee), as the currency powering its blockchain, which means any time Ammanah or any other customer uses its applications, a small transaction fee is levied in TSF. This also means customers are required to purchase TSF to run the blockchain-depended applications on which their businesses run, significantly saving on costs.

Libertas’s genesis

Libertas co-founder George Grujic is a serial entrepreneur who first got involved in cryptos in 2013 and, when Ethereum was launched in 2015, saw the potential to radically change the way we do business and transact. Hossenbocus was involved in IT and software development, and met Grujic through the school their respective children attended.

“George had a vision of creating a complete ecosystem for business and transactions using the blockchain, and I had a vision of how to do it,” says Hossenbocus.

“We are relatively unique in the world for the way in which we have brought these solutions to the marketplace and we’re just getting started.”

In the next instalment, we will explore some other ways Libertas is using smart contracts and blockchain to solve common business problems.

You can get more information here.

Brought to you by Libertas Group.

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