The philosophy of ModulTrade: what does the smart-contract mean for us and why will it be irreplaceable for small enterprises?

The Eureka moment for ModulTrade was the smart-contract, while others talked crypto currency and changing the world of fiat, the ModulTrade team knew that the smart-contract, the core part of the distributed ledger system solved the fundamental problem that beset the world of trade finance: how to guarantee: proof of supply and payment for goods or origin of goods?

Whatever else follows from the global transformation that Blockchain is set to bring, the introduction of the smart contract will be high watermark in terms of outstanding contribution. It is comparable to the introduction of Cloud computing but unlike Cloud it can be understood by companies and consumers at scale. I buy something, it is logged, the object or ticket is mine, it can be sold on, traded or used as surety for loans but at each and every stage the process is transparent. It cannot be faked, hacked or stolen it is an irrefutable proof of asset transfer and it is a beautiful thing.

How did we survive without it before?

The world tittered on the brink of chaos where banks and intermediaries acted to guarantee payment or letters of credit and manage everything and the process was obscure, obfuscated by local law and conditions that were hidden and varied. And prone to delays, grinding delays, and the system could freeze as 2008/9 taught us when even the biggest and brightest institutions could not guarantee themselves against their counter parties.

If I bought something was my proof of purchase a guarantee that I owned the goods? Not necessarily, it could be faked or sold via a fraudulent website; caveat emptor was the stock response of institutions who failed to guarantee the integrity of people using their network.

A smart-contract means the goods are tied to an actual piece of the Blockchain that tracks them: the vendors right to sell them, are they an approved stockist, does the supply chain show that the manufacturer passed them the goods, and when they sell them to me it is shown? The whole system is linked, open and with each link bonded to the next cannot be broken as goods transfer down the chain to the consumer.

It sounds simple and the light bulb moment is really a statement of the obvious need to have traceability for where goods come from and where they go to. And anyone experienced in the global flow of trade knows this, as the ModulTrade team are, and do. And that is why we are building the business on the back of the Blockchain and that is how trade will become democratized as the smart contract will become the natural way of doing business. With the passing of the old, the world will become smaller and easier to engage with. And at a fair price, will reflect the value of goods and not the cost in time and effort of getting them.

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