Report about Blockchain in AgriTrading: Dream or Reality?
Published in
3 min readJun 13, 2019
A very balanced, good report.
Challenges for blockchain adoption are indeed ample in grain trading but the potential benefits and unseen so far tools are too great to ignore. And some solutions are already live.
- IMHO there can’t be one blockchain platform for agribiz worldwide but many of them (yes they need to integrate with CRM/ERPs), bcs of its very complex nature. Some of them will focus on logistics, others — Tradetech (like our project Cerealia), trade fnance, etc. And in any case the needs of US/EU players differ a lot from the EM ones. Imagine, you hv all the same logistical issues plus huge currency volatility (dependence on USD to trade) and sky-high trade finance interest rates (in Turkey for ex. they are close to 30%). Also, for mass adoption, likely there is no need for traders “to run a node” (be part of the blockchain network itself), they should need only to connect to a website with their private-secret key.
- Likely there is no need to enforce blockchain standards in ags before they establish by themselves. And it’s great that we hv multiple projects exploring this tech. As a result, some of them might bring us the standards we need. Same thing — to use private or public blockchains. A platform now can use public blockchains, with all the data being encrypted (only a time stamp and a long line of letters and number — hash, will be available to public eyes on the blockchain). But if the interested parties (using this platform) click on hash— they will get immediately the doc in question (in a single-truth, irrefutable way).
- Of course, we need to use digital docs but also payments in cryptos, to get the full potential of blockchain features. And slowly but surely, we are heading towards that. ABCDs working on cargo docs digitalization and, gov-backed cryptos are being discussed and some are in the works. But I can’t agree with the opinion (not from this report) that first everything must be digitized and only after that blockchain should be used. Blockchain actually accelerates digitalization. For ex. our platform prefers to hv but not dependant on digital docs, and already now uses blockchain to make intl. grain trading negotiation&booking process 100% sure, compared to current manly on-the phone/email/messenger uncertainty. And yes it takes time to go live, we are currently fine-tuning our App. Those who are interested to participate financially in the project are welcome.
- The report talks about the need of regulation/third parties, but lets not forget the real nature of blockchain tech is that you don’t need them (and ask the traders — more regulation is not welcome for physical trading). Smart contracts will ensure you get your money if you execute the contract as per preagreed terms (again we need to pay in cryptos and use escrow accounts for that). And the need for this is more acute in EMs bcs they don’t hv the same biz traditions and very often legally require contracts to be signed (digital signatures are OK in most of them).
- Indeed, yet another tech might disrupt blockchain as well but IMHO it’s like to say if you go out you might hv a road accident. Let’s any way try to get to full blockchain potential but at the same time not forget about other great ones (AI, IoT, 5G, etc).
- In terms of unseen so far tools blockchain can bring are:
- Commodities’ tokenization — their digital representation, which will enable much more fluid form of the goods to trade/post as a collateral
- Cross-border, almost instantaneous, cheap payments bypassing old, heavy banking system (peer-to-peer, possibilities to trade in respective national currencies, cryptos)
- New sources of trade finance (for ex, stable-coins and other cryptos)
- Etc, etc, etc!!!
