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How Blockchain Can Significantly Contribute To The Agriculture Industry

Introduction

Agriculture is the backbone of many countries. Often many countries export and import agricultural products based on their requirement. But when it comes to trade concerning agriculture till day age-old methods are used. It is often said that billions of dollars’ worth of food are wasted not because there are not people who want food but because food doesn’t reach their plates at the right time.

Why do we need Blockchain in Agriculture?

📌 Provenance Tracking

Big giants like Amazon, Walmart used to struggle to pick up any product from their shelves and know the provenance of the product. It might even take days to understand sometimes. Walmart had to recall an entire batch of pork in China as it was not able to find the whereabouts of the product, and the product was not in a condition to consume. This resulted in millions of dollars of loss.

📌 Supply Chain

Given COVID 19 situation worldwide, many industries are hit very severely. Out of all the industries hit, Restaurants/Dining out would be the worst hit since even after the lockdown is lifted, people wouldn’t be willing to dine out. To gain the trust of the customers that food is treated with utmost hygiene, one would like to know the whereabouts the food served. Hence supply chain plays a crucial role in the same. Accordingly, if the information of the product is stored in blockchain right from its origin, the trust could be gained quickly.

📌 Organic/Inorganic

It is easy to pass in organic food as organic these days. Blockchain helps to trace the origin of food.

How can we leverage Blockchain technology in Agriculture?

Farmers for either organic or inorganic food can deal with big players directly without the involvement of mediators. With the help of smart contracts and IoT sensors, right from the very initial stage of sowing the seeds to harvesting to sending the crops to the warehouses of the vendors, everything can be achieved using blockchain.

This way, the vendors will have a clear picture of where their goods are coming from, payments are made on time with no loss to the farmers. With the help of IoT sensors, the adequate temperature can be maintained for the goods which will be tracked through blockchain, ensuring the crops are not spoiled during transportation.

Companies leveraging this technology

🏭 Walmart, in partnership with IBM, developed Food Trust blockchain for tracking the provenance of food from different vendors. Walmart has asked all its vendors to get into their blockchain platform to do business with them to ensure the success of the Food Trust blockchain.

🏭 Coco-Cola built a blockchain platform to ensure ethical sugar production.

🏭 Tony’s Chocolonely – The chocolate industry is labor-intensive, and a lot of child labor is employed for the same. Cocoa farmers are impoverished as the cocoa beans supply chain is extremely complicated, and hence, they cannot decide the price for their beans. Thus, Tony’s Chocolonely has agreements directly with farmers and even pay 40% more since they know the provenance of their seeds.

🏭 Unilever (HUL) is working to check the provenance of tea in Malawi.

🏭 Dreyfus used blockchain to close a deal of Soya beans with a Chinese Supplier. The deal was finalized smoothly, cutting transaction time drastically.

Implementing blockchain in the agriculture domain is not easy. The technology should be combined with IoT for precise tracking along the supply chain. Big players though actively trying to engage the technology it takes time for the farmer to be benefitted from the same. Many platforms are being built from different players, and interoperability remains a concern. Thus it takes time to evolve to the requisite level to reap maximum benefits, but it is inevitable to use the tech in agriculture widely.

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Crypto Daily Topic

How Blockchain can Improve Trade Finance

Blockchain technology continues to dominate headlines across the world thanks to its revolutionary solutions. In fact, an almost never-ending list of projects have been rolled out in various industries, demonstrating the benefits of this technology. 

The global trade finance market in particular is a fertile ground for blockchain solutions given the inefficiencies and fraud vulnerabilities plaguing the industry. The paper processes involved in the current trade finance framework need to be upgraded to digital operations and blockchain could play a big role in this transformation. 

How  Trade Finance Works

Basically, blockchain solutions aim at filling the gaps in an industry’s operational processes. For this reason, it helps to understand how the trade finance industry runs, so as to identify blockchain’s potential entry point. 

Trade finance refers to the financial products and companies that facilitate international trade. This means that there are several third-parties involved in a successful trade, adding cumulative costs. 

For example, imagine a local company seeks to import goods from an overseas company. The importer needs to pay for the goods but is hesitant to do so before full proof that the goods will arrive as ordered. The exporter on the other hand is also hesitant to ship the goods without proof that payments will be sent for the goods supplied. This is where intermediaries come in.

To ensure that both companies keep the end of their bargain, the importer’s bank sends a letter of credit to the exporter, promising to pay for the goods. However, the payment can only be made once the importer receives a document showing that the goods have been loaded into a cargo for shipping. 

This trade finance framework has been in place for quite a long time, with lots of paperwork being sent back and forth between the importer and exporter. It gets even more intricate with the involvement of freight forwarders, insurers and other small companies, making it prone to errors and frauds; not to mention the time and money used in the process. 

Utilizing Blockchain in Trade Finance

Blockchain, as a distributed ledger system, has the ability to streamline trade finance by creating an  end-to-end network where exporters and importers can engage directly. Here’s a quick primer on how blockchain can improve trade finance:

i) Increased Efficiency

By eliminating the need for an intermediary, blockchain can create a trade finance ecosystem where the importers and exporters share trade-related data in real-time. This would go a long way into minimizing delays and errors, thereby cutting the cost of documentation and increasing transaction speed.

ii) Maintaining compliance

A typical trade finance transaction requires the constant update of documents especially those related to regulatory and financial policies. This results in numerous paperwork and an opportunity for errors leading to expensive fines and lawsuits. 

With a blockchain-based finance trade platform, all the necessary data is stored in a decentralized ledger for relevant parties to access. As such, it becomes easier to update the documents in compliance with the relevant authorities. 

iii) Transparency 

Since blockchain is decentralized, all involved parties in trade finance transactions can view and approve the necessary documents throughout the transactional cycle. What’s better, the ledger system can keep an account of all transactions including the past and the recent ones, all in a tamper-proof record. This way, it is easier for financial institutions to conduct an audit on all transactions, further reducing the risk of fraud. 

iv) Eliminates Double Spending 

Blockchain enables traders to initiate smart contracts which ensures that all trading procedures are dutifully executed. For importers, smart contracts ensure they only pay for the right amount of goods as ordered while ensuring the exporters don’t change the number of goods. As such, there won’t be a scenario where the importer spends more than what is documented in the original bill of lading. 

v) Tracking of Goods

One of the most classic applications of blockchain is in the supply chain, where it is applied to track goods and streamline the process. Trade finance’s intricate supply chain can therefore benefit a lot from the integration of blockchain into its logistics. As such, it’ll be easier for importers to track their goods and even mitigate potential delays, which increases confidence between trading partners. 

More advanced trade finance blockchain solutions also offer special tracking options such as weather conditions, temperature and safety of the goods. Such details are essential when shipping delicate or weather-sensitive goods. 

However, before blockchain can be fully integrated into the trade finance industry, there are a couple of improvements that should be made.

  • Interoperability

Currently, it is quite difficult to implement blockchain solutions in trade finance given that the parties involved often work independently. For blockchain to penetrate the trade finance industry, the global trading partners, financial institutions, shipping companies, and other key stakeholders need to talk in the same digital language. 

Unfortunately, to some of the parties involved, trade finance isn’t necessarily their highest priority. So, they might not be interested in switching to blockchain solutions. In the case of a bank, for instance, the financial support they provide to importers and exporters is just a piece of their larger service package. 

  • Security Vulnerabilities

Blockchain by itself is a secure technology leveraging the power of cryptography to safeguard all transactions, or rather data, recorded in the system. But, the technology has to be modified to suit the trade finance market. Usually, the modification is done using additional technologies and coding languages, which end up creating loopholes in the ledger’s security. 

  • Regulatory Barriers and Costs 

Blockchain is a new technology whose concepts and functionality hasn’t been adequately addressed by existing regulations. This explains why trade finance executives have a problem adopting blockchain solutions, despite their evidential benefits. 

Blockchain developers and entrepreneurs have also been on the receiving end of harsh government regulations, crippling their efforts in developing better blockchain solutions for trade finance. 

On top of it all, upgrading from the existing trade finance infrastructure to blockchain-based solutions is overly expensive. 

Conclusion 

Trade finance has for long played a huge role in the economic growth of every country. While it’s current framework serves the purpose, the industry could benefit from upgrading to blockchain, especially in the current modern times where most activities run on technology. Nonetheless, the success of blockchain technology in the trade finance industry hinges on the wide-scale adoption of the technology. 

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Crypto Guides

The Fascinating Applications of Smart Contracts

Introduction

In the previous guide, we have understood what smart contracts are and what role they play in eliminating third parties. You can find that guide here if you didn’t get to read that yet. Smart Contracts have come out as one of the interesting applications of blockchain technology but it evolved so well that it has already been applied in most of the industries. Experts believe that these smart contracts do have significant applications in many other industries. Hence, in this article, let us see their usage in different industries.

Health Care and Medical Records

One primary application of smart contracts lies in the healthcare industry. Transferring and sharing patients’ electronic medical records (EMR) should be done in the most secure way. We are not saying that the current technology is not secure at all. We are just saying that using this technology will enhance the existing security.

Smart contracts enable multi-signature approval features enabling both patients and health care providers, allowing them to share the information securely as these are sensitive data. Patients can allow their data to be sent to research organizations for various studies and can be sent micropayments to the patients for participation using the same platform. We must not forget that a lot of infrastructure and technology should be built to achieve the same.

Banking

Banking systems have undergone a lot of changes proportional to technology adoption by the people. Smart contracts can play a crucial role in the mortgages provided by banks or any non-banking financial institutions. Banks spend a lot of money to check if the property that is being mortgaged currently is already mortgaged or not. To check if the property does indeed belong to the person applying for the mortgage or not. If the documents of the property are placed in blockchain with the help of smart contracts, this can be verified in a click. This saves a lot of money to both consumers and banking, reportedly in billions.

KYC

These days we have to provide our KYC documents at various places like to open a bank account, to take a sim card, driving license, registering property to name some. If the KYC documents are stored in a blockchain, with the help of smart contracts, the right people can be given proper authority to access them. Also, if any changes required from our side, we need to make a change at one single repository instead of making changes at every entity where we have given the documents.

Supply Chain

Supply Chain is one major area that can benefit hugely using blockchain adaptability and thereby using smart contracts. There are various documents throughout the supply chain cycle which can be misplaced and tough to authenticate at and every area required. If smart contracts are used to share and verify these documents, a lot of time and money can be saved to clear the goods at national highways, significant seaports, etc. Provenance tracking can also be done, thus increasing the bar of trust among consumers.

Voting

Voting can be achieved relatively and transparently using blockchain and smart contracts. With blockchain involved, no one can tamper with the election process, and with the smart contracts, it is possible to ensure the correct person is voting instead of the duplicity of votes.

Insurance

We all know it takes time for the insurance industries to clear the claims as it takes time to check the claims for its authenticity. With the adoption of smart contracts, the respective authorities can easily fact check the claims. For example, for travel insurance, we can easily verify whether the flight is a delay or canceled, thus passing the request.

However, all these industries can actively adapt and grow using blockchain only in the ideal world where blockchain is integrated throughout all sectors and government institutions. Active engagement and development are only possible when adoption is at a high rate. The blockchain technology is still growing, and a lot of innovation and growth is yet required to use the full potential of blockchain and thereby smart contracts as well.

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Crypto Guides

Some Of The Top Use Cases of Blockchain In Real Life – Part 1

Introduction

Blockchain is a new revolutionary technology. Its features have guided technologists to look at the technology efficiently and innovatively. Before getting right into the use cases of blockchain, let’s see some of the primary technical features of this technology.

The technical features include,

  • The use of distributed ledger technology
  • Security through cryptography
  • Ability to have smart contracts logic embedded into it

With these features, there are several compelling uses cases of blockchain that we believe will reduce inefficiency and unlock more valuable areas in the existing industries. Here are some of the most compelling use cases of this technology.

💰 Asset Tokenization

Without any doubt, the most compelling use cases of blockchain are the application in financial services and asset tokenization in finance in particular. Using blockchain technology, illiquid assets can easily be converted into its tokenized form and can be efficiently fractionalized. It can even be traded and settled on-chain. In this way, it does not have to go through the lengthy process of clearing and settlement processes. TOkenization will also unlock liquidity for small business owners, entrepreneurs, and real estate owners.

Alphapoint, Polymath, Harbor, Smart Valor are working on a platform for asset tokenization.

🚚 Supply Chain Management

Supply chain management is another great use case of blockchain technology. Transparency in the supply chain is one of the biggest problems firms tend to face. But, one of the features of blockchain eliminates this issue. Blockchain allows anyone in the network to access the database and act as a single source of truth referred to as consensus. From a consumer’s point of view, blockchain can help find the genuineness of products that are claimed to be.

Vechain and Origin Trail are examples that are currently working in this domain.

Energy Market

A few large corporations control the energy market in any given geography. To decentralize the market, blockchain technology can be of great use. If electricity is traded like any other commodity, prices in the commodity market would be affected by forces like demand and supply as well, instead of being a fixed regulated price.

Power Ledger and Grid+ are examples of peer to peer energy trading.

🚑 Healthcare

In the present state of healthcare technology, patient data is held across different institutions in legacy silos in several different formats and standards, making sharing of information ill-suited for the modern world. Although the healthcare industry has improved a lot over the years, blockchain technology can make the situation better. This generation requires data to be available to the users instantly. And Blockchain can get this into play. Blockchain technology can record patient information on a distributed ledger, which allows different institutions to access data as a single source of truth. Also, with blockchain, the access to patient’s health records is more secure as it is encrypted.

Medicalchain is an example of a healthcare data exchange platform.

These are only some of the most compelling use cases for blockchain technology. In our upcoming article, we will be discussing the applications of this groundbreaking tech in different other industries. So, stay tuned!