By Margarita Vznuzdaeva
May 31st, 2018

Blockchain and cryptocurrencies in agriculture

Another sphere where the blockchain technology has entered

Blockchain and cryptocurrencies in agriculture

By Margarita Vznuzdaeva
May 31st, 2018

Another sphere where the blockchain technology has entered

New technologies have already entered different spheres of humans’ lives and agriculture is next. How can blockchain transform the supply chain and why ecological cryptocurrency is needed?

Blockchain in agriculture.  The advantages of the blockchain implementation into agriculture are rather obvious:

  • The transparency of this technology can easily make the process of food growth and its logistics visible;
  • The monitoring of crops can be made more careful;
  • Visibility of all the processes will help eliminate frauds and corruption on any level of agricultural goods transportation;
  • Switching to electronic registration of all the deals instead of paperweight and notary services will more than likely save time and transaction costs.

At the same time, these significant advantages are balanced out by no less significant difficulties. Back in 2017, Wageningen Economic Research and TNO conducted a large detailed “Blockchain for Agriculture and Food” study financed by the Dutch Ministry of Agriculture, Nature and Food Quality. This research in particular reviews challenges different stakeholders face when creating a blockchain plantation. For example, the most difficult step for food producers is to implement business oriented new technology with all party access and right conditions into smart contracts. The certification bodies business model can be threatened by the blockchain implementation or the new competencies for this stakeholder will be needed. The authorities will also require new capacities and changes in already existing national aa well as international regulations. In the retail business blockchain might compete with the existing logistics systems and face the privacy terms problem. Anyway, the system has already been tested by Walmart and the result, as Coindesk wrote in June 2017, was “very encouraging”. In May 2017 the company looked for a patent of a system using blockchain technology to track packages delivered by drones. As for blockchain startups, the biggest challenge is to find the right funder and “partners in crime”.

Now let’s move on to some real examples of startups based on blockchain that provide businesses and consumers with expanded information about agricultural goods.

Provenance and FarmShare startups share data about the product from farm to table. The first business is more client oriented with information about empowering the whole supply chain for retailers, producers, shoppers and partners on its principal page, where the second startup works more on philanthropic issues, like malnutrition, hunger and food insecurities.

There are several startups created to find effective solutions to the high transaction fees problem: AgriLedger, working only with agricultural sector and BitPesa, providing different businesses with “easy FX and B2B payments”.

The Ambrosus startup plans to create a trusted ecosystem for global food market to make history of all the products transparent and the transactions between stakeholders in the agricultural sphere easier. As Angel Versetti, the CEO of Ambrosus, said to MUNCHIES, “In a nutshell, it is a platform that assures quality, safety, and origins of food in a verifiable matter.” Versetti further stated that it would be the first marketplace for food products powered by smart contracts in comparison to other already existing startups in this area. FoodCoin, a global blockchain for food and agricultural businesses promoter, also jumped on the wagon of supporting the idea of an ecosystem.

The Filament platform eases working machine control for farmers with the help of the the Internet of Things (IoT) technology.  SkuChain is used for tracking goods through supply chains.

The first commodity deal with blockchain technology called Easy Trading Connect (ETC) took place in January 2018. As Business Insider reports, the soybean shipment transaction was conducted between the Chinese company Shandong Bohi Industry and American Louis Dreyfus. The ING, Societe Generale and ABN Amro banks were also involved. The ETC platform significantly simplifies and accelerates trading operations, digitizing different documents from purchase and sale agreements to letters of credit, as well as reduces the need for legal support for every transaction. According to the developers group statements, this technology allows to speed conducted transactions up to five times. ETC had been previously used for the crude oil trade, but then its policy switched to agricultural sector.

Cryptocurrencies in agriculture. If you try searching the web for “agricultural cryptocurrency”, most likely you will see many webpages promoting agro cryptocurrencies. If that’s the case, better read between the lines: firstly check CoinMarketCap if the promoted crypto is presented there (if not, it might be a pre-sale or a currency already eliminated from the market), then check its dynamics and evaluate how promising it seems. Undoubtedly, it is going to be a superficial analysis, but it is a necessary base to understand whether it is worth delving into the specifics of the project. Here we have two Russian agricultural cryptos, appearing in the Russian medias raising interest among authorities.

BioCoin is the first eco-coin made by the founder of LavkaLavka farmer cooperative Boris Akimov, helping develop local farmer and small businesses. BioCoin uses PoS algorithm and solves the problem of non-ecological mining. 50 companies already use BioCoin in real deals and the company predicts more than 3000 companies to join the platform by the end of 2018. The legal support of the project is driven by Elina Sidorenko, head of the department dealing with the risks of cryptocurrencies turnover in the Russian State Duma.

Kolion is a Russian cryptocurrency used among farmers instead of fiat money to make rural trades easier. Its founder Mikhail Shlyapnikov comes from a village named Kolionovo. At first, it was printed on photographic paper, now, however, it can also be seen as a virtual cryptocurrency on CoinMarketCap.

According to the information given by Shapnikov on CoinTelegraph, 2 kolions equals 10 eggs, 5 kolions – a potato bucket, 60 kolions – a goose.