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4 Challenges Blockchain Must Overcome To Achieve Mass Appeal

4 Challenges Blockchain Must Overcome To Achieve Mass Appeal

When most people think about blockchain, they likely associate it with Bitcoin or other types of cryptocurrency.

But the blockchain technology introduced a decade ago to serve as a secure database for transactions in the cryptocurrency world has plenty of uses beyond that – and potential for even more. Around the world, blockchain can be or already has been used in such areas as energy, tourism and financial services.

Yet, plenty of people still have little knowledge of this technological breakthrough that could transform how they do business and live their lives. That raises a couple of questions: Is blockchain ready for the masses? And are the masses ready for blockchain?

“Despite renewed investor interest, blockchain technology still needs to evolve to overcome some challenges before adoption reaches people who are not early adopters or who are not very tech savvy,” says Kirill Bensonoff (www.kirillbensonoff.com), a serial entrepreneur and an expert in blockchain.

Those challenges include:

Interaction with other systems. Blockchain’s growth depends on the technology’s ability to scale and interact with other systems and networks, Bensonoff says. “Right now, blockchain as a service is limited in performance because of slowed transaction processing times and the inability to have various blockchain platforms interact with each other,” he says. Just one way this challenge is being addressed is by developers creating consensus mechanisms, Bensonoff says. Consensus mechanisms refer to how participants in a blockchain network agree that the transactions recorded in the digital ledger are valid. “This mechanism creates a trust and validity in the transaction between participants who aren’t familiar with each other,” he says.

Cost and usability.  The cost of creating and implementing blockchain networks remains a significant barrier, Bensonoff says. One possible solution could be the introduction of cloud-based blockchain technology from tech giants such as IBM, Microsoft and others. “These companies have made cost reduction and scaling the crux of their business offerings,” he says. For blockchain to evolve, the average user experience also needs improvement, Bensonoff says. “The good news is that developers and blockchain companies are catching on, and working to create a more welcoming look and feel for consumers,” he says.

Regulation. If there’s a grey area in the blockchain world, regulation is it, although some states, such as Wyoming, and countries such as Malta, Estonia and Switzerland, are attempting to change that. “In the meantime, this regulatory limbo is affecting adoption, with many waiting for some finality in legislation before they implement their own blockchain solution,” Bensonoff says. As some states pass blockchain bills, hopes are high that others will follow suit, he says.

Privacy. Blockchain’s transparency is one of its strengths – and a weakness. Bensonoff points out that blockchain acts as a public ledger, which is necessary for the technology to provide trust and to verify transactions. But that can make use of blockchain troublesome for some industries, such as healthcare, which needs to protect the privacy of much of its data. Some solutions on the horizon, Bensonoff says, include making use of new developments like stealth addresses, ring-confidential transactions and state channels.

“Blockchain is definitely going to become more useful and more popular,” Kirill says. “But it must overcome these hurdles to get where it needs to be.”

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Kirill Bensonoff (www.kirillbensonoff.com) has over 20 years experience in entrepreneurship, technology and innovation as an advisor and investor in over 20 companies. In the information technology and cloud services space, Kirill founded US Web Hosting while still in college, was co-founder of ComputerSupport.com in 2006, and launched Unigma in 2015. As an innovator in the distributed ledger technology (DLT) space, Kirill launched the crypto startup Caviar in 2017 and has worked to build the blockchain community in Boston by hosting the Boston Crypto Meetup. He also is the founder of the Boston Blockchain Angels, producer and host of The Exchange with KB podcast and leads the Blockchain + AI Rising Angel.co syndicate. Kirill earned a B.S. degree from Connecticut State University, is a graduate of the EO Entrepreneurial Masters at MIT, and holds a number of technical certifications. He has been published or quoted in such national business, blockchain and technology media as Inc., Hacker Noon, Huffington Post, Bitcoin Magazine and CoinTelegraph.

 

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How Blockchain Can Fight Counterfeiting and Fraud

A recent report by the Organization for Economic Cooperation and Development and the European Union’s Intellectual Property Office shows that imported counterfeit goods raked in $509 billion in 2016 — nearly 3.3% of all global imports for that year. To fight back against the rising tide of knockoffs threatening their brands, companies are turning to blockchain technology to create more transparent supply chains.

Blockchain is a distributed, decentralized ledger technology controlled by smart contracts and regulated by a consensus protocol. The ledger automatically records every transaction, and every record it creates is unalterable. Depending on exactly how one uses the ledger, it can be classified as permissioned, public, or fit for purpose.

Within a brand’s supply chain, a blockchain ledger can manage a variety of activity from automating contract compliance between entities via smart contracts to tracking products from manufacturing to distribution. The ledger eliminates supply chain ambiguities and creates transparency that ensures companies and customers get the quality for which they pay.

Blockchain’s Value in Existing Supply Chains

The value of modernizing supply chains with blockchain isn’t just theory. Major brands have already begun partnering with tech firms and other entities in response to rising demands for improved brand protection. LVMH (Louis Vuitton SE), for instance, working closely with Microsoft and ConsenSys, has created Aura Ledger to provide proof of authenticity of luxury items and trace their origins from raw materials to point of sale and beyond to the used-goods markets.

Throughout the retail industry, companies like eBay are starting to offer product authentication as a value-added service. Currently, the company authenticates only handbags due to rising concerns from customers about their authenticity. However, eBay plans to expand authentication to additional luxury items that might be subject to counterfeit.

In agriculture, the blockchain-based Grain Discovery streamlines transactions between farmers and buyers, making it easier for them to form new partnerships. In the pharmaceutical industry, distributors have formed the MediLedger consortium to track the provenance of pharmaceuticals and stem the counterfeit drug market worth more than $75 billion annually.

In virtually every industry, suppliers and distributors are turning to blockchain technology to lower their risk of fraud. A decentralized, immutable record of every product’s journey can help verify authenticity — or lack thereof.

Blockchain as a Force Against Fraud

Companies that worry about counterfeit versions of their products have options to address the issue. When implemented together, the following steps can help mitigate risk and inspire confidence among companies and consumers alike:

Establish a secure supply chain network.

For blockchain to successfully transform a company’s supply chain, every business entity along the chain must agree to participate. That makes establishing a network of trusted partners the most important step toward securing products.

For example, the jewelry consortium TrustChain, which operates on IBM’s blockchain platform, only works because the group includes the mines that produce jewels, manufacturers that refine them, and retailers that sell them.

Given the rise of counterfeit purchases, most companies with strong brands are looking to work with their suppliers to prevent fraud. The momentum of such efforts increases when every stakeholder in the supply chain sees the value and signs up to actively participate in the efforts.

Choose the tags most suited for the brand and product.

Only with the right tagging technology can blockchain technology track every product along its journey. Through various IoT devices, tags can detect diversions, liquid leaks, vibrations, package openings, tilt, excessive force, and more.

Companies have several options, such as smart tags and high-resolution signatures that digitally relate products to the blockchain. Purpose-fit tags that have been developed to track shipments at the container, pallet, and package levels further help. Companies can also employ decentralized identifiers (DIDs) that are universally resolvable and globally visible to stakeholders throughout the supply chain.

This topic holds great interest across many industries. The RFID Lab at Auburn University recently announced the Chain Integration Project (or CHIP) launch, a project focused on finding ways for retail and apparel companies to communicate with their suppliers about tracking product inventory at the item level using radio frequency identification tags and blockchain. The project has attracted global companies across many industries due to the applicability across supply chains outside of retail and apparel.

Some products don’t need to be tracked with such intricate detail, while others should be tagged to track every moment of their journeys. Determine what tagging technology makes the most sense, adds business value, and is easiest to manage along the entire supply chain.

Encourage customers to be part of the solution.

When customers clearly and directly benefit from a company’s use of a blockchain-enabled supply chain, getting more partners to join the consortium becomes easier. However, brands can’t expect all end users to automatically jump on board.

When eBay released its authentication program for handbags, it did so in response to a need its customers had expressed. To entice sellers to participate, it offers several incentives if they sign up to authenticate their products.

Before long, the streamlined processes and unprecedented transparency that blockchain provides will be more than enough to encourage participation. Until then, make it more attractive through bonuses and other rewards in order to incentivize users and increase customer stickiness.

Unleash IoT, AI, and ML to actively fight fraud.

Protecting against counterfeiting and fraud isn’t always a passive exercise. With blockchain, companies can unleash the potential of IoT, artificial intelligence, and machine learning to actively prevent fraudulent transactions.

For instance, customers can scan product tags to verify their authenticity or compare images of the product against its stored signatures. Proof of purchase and other transaction details can be cryptographically linked to the buyer and product and then subsequently uploaded to the blockchain.

Any product that bears a brand’s name but can’t be tracked to its manufacturer would be considered counterfeit. A company can ensure, in real time, that it receives compensation for every product sold with its name on it.

The reported value of fraudulent goods that hit the global market is expected to continue rising, but companies are no longer helpless in the face of counterfeiters. As more industries and their supply chains embrace blockchain technology, counterfeit goods will no longer have a place in any market.

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Mohan Venkataraman is the chief technology officer of Chainyard, a blockchain consulting company focused on delivering production solutions that address supply chain, financial services, transportation, government, and manufacturer pain points. With more than 20 years of proven experience, Mohan has extensive skills in software engineering, governance best practices, and industry models. With exposure to more than 70 clients, he has a clear focus on understanding client needs and aligning technology and business priorities to deliver value. His current interests include blockchain, cloud solutions, big data, service-oriented architecture, governance and integration competency center establishment, and enterprise architecture, with a focus in telecom media, technology, insurance, retail, healthcare, and life sciences industries.

Will Facebook’s Libra Help Bring Cryptocurrency To The Masses?

When Facebook announced plans for a stablecoin called Libra, the reaction from the cryptocurrency world ranged somewhere between skeptical and cautiously optimistic.

But, regardless of any specific merits of Facebook’s version of a digital coin, the social-media giant’s move could help speed the adoption of cryptocurrency to a larger audience, says Kirill Bensonoff (www.kirillbensonoff.com), a serial entrepreneur and an expert in blockchain.

The biggest issue now is that most people are not familiar with crypto; they think it’s difficult to use, and they may not trust it,” Bensonoff says. “Facebook will put a digital wallet on many phones and computers, and sending payments with crypto will become commonplace.”

Facebook’s Libra is proposed as a stablecoin, which is a form of cryptocurrency. Using Libra, people would be able to buy things or send money to others while paying, at most, minor fees. Unlike other cryptocurrencies such as Bitcoin, the value of stablecoins is tied to an asset such as gold, the U.S. dollar, the Euro or other currencies.

Facebook won’t have complete control of Libra. It’s just part of a bigger group of partners that’s creating the stablecoin.

What might all this mean for the future of cryptocurrencies – and for the average person who still knows little about them? Bensonoff says a few things worth knowing about Libra in particular and stablecoins in general include:

-Bringing stability to cryptocurrency. As the name implies, the idea of stablecoins is to bring more stability – and more peace of mind for wary investors – to the world of cryptocurrency. “I don’t think Facebook will bring stability immediately,” Bensonoff says. “I believe it’s going to take a lot more in terms of mass adoption, but Libra could be a step in the right direction.”

-The SEC’s view. Regulators at the Securities and Exchange Commission have been eyeing stablecoins with the possibility that some of them could be classified as securities. “That could put stablecoins in the same category as stocks, subject to the registration, disclosures, and accreditation of investors that demands,” Bensonoff says.

-Will Libra replace PayPal? Maybe not, considering that PayPay is one of the founding members of Libra, Bensonoff says. “I think they will have some influence on the direction,” he says. “However, crypto in general is a threat to all existing payment processors, including PayPal. I believe PayPal is smart and will adopt and accept crypto payments, and they will figure out a way to monetize it. The downside for them is they won’t be able to charge nearly as much as they do now.”

“I believe Libra is going to have a positive impact in terms of awareness, adoption and interest in cryptocurrency from both businesses and consumers,” Bensonoff says. “But at the same time, with that could come more regulatory scrutiny.”

About Kirill Bensonoff

Kirill Bensonoff (www.kirillbensonoff.com) has over 20 years experience in entrepreneurship, technology and innovation as a founder, advisor and investor in over 30 companies. He’s the CEO of OpenLTV, which gives investors across the world access to passive income, collateralized by real estate, powered by blockchain. In the information technology and cloud services space, Kirill founded U.S. Web Hosting while still in college, was co-founder of ComputerSupport.com in 2006, and launched Unigma in 2015. All three companies had a successful exit.

As an innovator in the blockchain and DLT space, Kirill launched the crypto startup Caviar in 2017 and has worked to build the blockchain community in Boston by hosting the Boston Blockchain, Fintech and Innovation Meetup. He is also the producer and host of The Exchange with KB podcast and leads the Blockchain + AI Rising Angel.co syndicate. Kirill earned a B.S. degree from Connecticut State University, is a graduate of the EO Entrepreneurial Masters at MIT, and holds a number of technical certifications. He has been published or quoted in Inc., Hacker Noon, The Street, Forbes, Huffington Post, Bitcoin Magazine and Cointelegraph and many others.

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SMALL AND MEDIUM-SIZED GLOBAL TRADERS ARE BANKING ON BLOCKCHAIN

This is the second in a three-part series by Christine McDaniel for TradeVistas on how blockchain technologies will play an increasing role in international trade.

Give Me Some Credit

Every business requires capital to operate. To sell products to customers overseas, many companies also need trade financing and insurance from third-party lenders. About 80 percent of all global trade is transacted through third-party lenders and cargo insurers, but the process is complex, can be costly and many banks find it too risky to support small and medium-sized enterprises (SMEs).

Blockchain has the potential to increase transparency, speed and accuracy in assessing risk across the trade finance process, which in turn could expand the supply of credit available for international trade transactions – good news especially for SMEs that face significant hurdles accessing credit. Here’s how.

Pay Me Now or Pay Me Later

Buyers who import goods from sellers in other countries generally want to pay upon receiving the merchandise so they can verify its physical integrity on arrival. Exporters, on the other hand, generally prefer to be paid as soon as they ship the goods. Trade finance can bridge this gap.

Exporters and importers engage third-party lenders and insurers who will guarantee payments on the basis of collateral and indemnify the exporter, importer and related parties in the event that the merchandise is damaged, stolen or lost while in transit. In this way, trade finance provides the credit, payment guarantee and insurance needed to facilitate an international trade transaction on terms that will satisfy all parties.

80% of trade relies on finance

Steps on the Trade Journey

Intermediaries such as freight forwarders typically manage the physical journey of merchandise, from the original producer to the border, across the border (maybe several borders), and to the final buyer.

Each step must be verified: when was the merchandise transported from the factory or farm to a warehouse, when was it moved from the warehouse to a container, when was the container loaded onto a ship, when did the ship get underway, when was the container unloaded from the ship at port, and when was the merchandise transported from the port to the end consumer.

Different trade finance instruments, such as lending, letters of credit, factoring and cargo insurance cover legs of the journey. A letter of credit is a guarantee from a bank that a buyer’s payment will be received and be on time or else the bank will take responsibility for the payment. Factoring is accounts receivable financing to accelerate cash flow. Cargo insurance insures the merchandise while en route.

Without Finance, Trade Would Sink

The World Trade Organization estimates that 80 percent of global trade relies on trade finance or credit insurance. The global trade finance sector (i.e., the global volume of letters of credit) is worth roughly $2.8 trillion. Demand for trade financing exceeds availability, resulting in the underutilization of existing capital. According to the Asian Development Bank, the global trade finance gap — the difference between the demand for and supply of trade finance — has reached $1.6 trillion.

SMEs Face a 50 Percent Rejection Rate

The shortfall in supply reflects the complex and risky nature of trade finance which often involves multiple parties. Before banks will issue letters of credit in trade finance, they require potential customers to present a solid credit history and a strong balance sheet, conditions that tend to favor larger institutions.

SMEs typically experience more difficulty navigating the trade finance process and dealing with the cost and complexity of banking regulations than larger companies. In 2014, SMEs had trade finance requests before financial institutions rejected at a rate of over 50 percent. In comparison, the rejection rate for multinational corporations was only seven percent.

Links in the Trade Finance Chain

According to the United Nations, there are typically eight major steps required to obtain a letter of credit, although in practice the Credit Research Foundation lists more than twenty. Each step of the process is dependent on the previous steps, and some steps involve sending the same document back and forth for verification purposes. The administrative burden is greater for SMEs than for large firms.

survey of 2,350 SMEs and 850 large firms conducted by the U.S. International Trade Commission in 2010 showed that lack of access to credit is the major constraint for SME manufacturing firms seeking to export or expand into new markets and it is one of the top three constraints for SME services firms.

rate of rejection for trade finance

How Blockchain Can Help Ease Trade Finance

Requirements to authenticate each transaction in the trade finance and insurance process can engender large amounts of paperwork and cause delays at each step. Every handoff must be approved and verified.

Instead, blockchain uses digital tokens that are issued by each participant in the supply chain to authenticate the movement of goods. Every time the item changes hands, the token moves in lockstep. The real-world chain of custody is mirrored by a chain of transactions recorded in the blockchain.

The token acts as a virtual “certificate of authenticity” that is much harder to steal, forge or hack than a piece of paper, barcode or digital file. The records can be trusted and greatly improve the information available to assure supply-chain quality.

Using blockchain as a digital ledger for these handoffs would allow involved parties to instantly track and receive secure information about the traded goods. Parties can monitor the entire shipping process and verify the completion of each step in real time. This increased transparency and ease of monitoring reduces the risk that a borrower presents to a potential lender or insurer.

Banking on Blockchain

A number of financial institutions are piloting the use of blockchain-enabled trade finance platforms.

Bank of America, HSBC, and the Infocomm Development Authority of Singapore collaborated in 2016 to develop a trade finance application designed “to streamline the manual processing of import/export documentation, improve security by reducing errors, increase convenience for all parties through mobile interaction, and make companies’ working capital more predictable.” Using the application, each action in the workflow is captured in a distributed ledger and all parties (the exporter, the importer, and their respective banks) can visualize data in real time, offering transparency to authorized participants while ensuring confidential data is protected through encryption.

Barclays used blockchain in 2017 to issue letter of credit that reportedly guaranteed the export of $100,000 worth of agricultural products from Irish cooperative Ornua to the Seychelles Trading Company, noting the parties were able to execute a deal in four hours that would usually take up to 10 days to complete.

A group of European banks launched a trade finance blockchain platform in July 2018, initially focused on facilitating small and medium-sized businesses trading within Europe. In September 2018, the Hong Kong Monetary Authority announced plans to launch a trade finance blockchain platform. Twenty-one banks are participating in the platform, including large institutions such as HSBC and Standard Chartered. The Hong Kong Monetary Authority is also reportedly working with its counterpart in Singapore to develop a blockchain-based trade finance network to settle cross-border transactions.

Lessons for Trade Policymakers

As the trade finance industry begins to utilize blockchain technology, there are some potential implications worthy of policymakers’ attention.

First, the large number of intermediaries and corresponding administrative costs in trade finance tend to fall particularly hard on SMEs and the relatively higher cost of each transaction makes SME financing less attractive to banks. If blockchain can reduce the costs of trade finance, more small and medium-sized businesses could trade globally.

Second, although blockchain technology does not alter the fundamental credit risk of borrowers, the increased transparency and access to information it delivers could improve the accuracy of banks’ risk assessments. If perceived risk is greater than actual risk, a nontrivial number of loan applications may be denied even though those loans have the potential to be successful. If blockchain brings greater confidence and issuance of good loans — that is, those that are paid back — the transactions they support would bring value to the economy.

In these important ways, blockchain can increase transparency across the trade finance process and decrease risk for all parties, in turn expanding the supply of credit available for international trade transactions.

ChristineMcDaniel

 

Christine McDaniel a former senior economist with the White House Council of Economic Advisers and deputy assistant Treasury secretary for economic policy, is a senior research fellow with the Mercatus Center at George Mason University.

This article originally appeared on TradeVistas.org. Republished with permission.

Blockchain

Where Have You Been? Blockchain for Tracking Goods in Trade.

Why is it so hard to track the origin of a diamond, or take longer than we’d like to trace the source of a food safety outbreak? It turns out that we’ve been tracking the supply chain in some really antiquated ways, but that’s about to change thanks to blockchain.

Origins and Travels

The “provenance” of a good refers to its origin as well as a chronological record of its ownership, location, and other important information as it moves along a supply and distribution network.

Many companies are exploring the use of blockchain technologies to help track this information much deeper into their supply chains than previously feasible. A retailer, for example, might require detailed information about materials, components, and ingredients as would manufacturers sourcing from a variety of suppliers.

Using blockchain technologies to track the origins of raw materials and follow domestic and international supply chains can also help meet the increasing demand for consumer information about globally produced goods, providing more transparency and accuracy about a product’s long journey to the store.

How Blockchain Can Help

Blockchain works to track the provenance of a good thanks to digital tokens that are issued by each participant in the supply chain to authenticate its movement. Every time the item changes hands, the token moves in lockstep. The real-world chain of custody is mirrored by a chain of transactions recorded in the blockchain.

The token acts as a virtual “certificate of authenticity” that is much harder to steal, forge or hack than a piece of paper, barcode or digital file. The records can be trusted and greatly improve the information available to assure supply-chain quality.

Blockchain technology can also make the audit process more efficient. The ledger distributes responsibility to the owners of pieces of information while ensuring verification along the way. The transactions are transparent to parties on a permission basis.

Consumers Want to Know

Surveys show that consumers in the United States and around the world are becoming more aware and interested in the origins of the merchandise they buy and the food they consume. Many also want to know how production processes of the goods they consume impact the environment and society.

The Pew Research Center found that 75 percent of Americans are “particularly concerned” for the environment, and 83 percent make an effort at least some of the time to live in ways that protect the environment. Nearly three out of four Millennials surveyed by Nielsen say they would pay extra for “sustainable” products and brands with a reputation for environmental stewardship. When it comes to food products, 71 percent of people surveyed by Label Insight said they want access to a comprehensive list of ingredients when deciding what food to buy.

Sustainable Coffee, Genuine Brand Purses and Conflict Diamonds

Retailers are concerned that brand loyalty is on the decline. But with some products, high consumer demand for product information is associated with higher expenditures, meaning people might pay more for a product they believe is ethically or sustainably sourced or manufactured. Blockchain can be used by companies to verify the claims their customers care about.

Take Starbucks, for example. Since 2004, the company has worked to support farmer livelihoods through its Coffee and Farmer Equity (C.A.F.E.) program. In 2015, they announced that 99 percent of their coffee was “ethically sourced,” complying with a set of principles and practices at each step of the supply chain from farm to cup. Last year, they took traceability to the next level by piloting the use of blockchain to create a transparent and direct connections with tens of thousands of coffee farmers. Customers can now see up close a supplier’s sustainability practices.

Worried your designer handbag isn’t the real deal? The luxury goods industry is seeking to use blockchain to verify the authenticity of its product. Brand name shoes, dresses or purses would have specific codes that retailers and consumers could use to track changes in ownership. Given the decentralized blockchain platform and multiple authentication processes to update the ledgers, fraudulent entries will be nearly impossible. The auditable and tamper-proof records produced through blockchain technology could help combat trade in counterfeit goods, which is a $1.77 trillion problem for manufacturers according to the International AntiCounterfeiting Coalition.

Blockchain is a promising development for the diamond industry, which struggles to prevent so-called “conflict diamonds” from entering their value chains. A United Nations panel reportedly found that 140,000 carats of diamonds were still being smuggled out of the Central African Republic between 2013 and 2015 and traded illicitly to finance armed conflict despite an export ban. De Beers, which controls 37 percent of the global diamond market, reported earlier this year that it was able to track 100 high-value diamonds from mine to retailer using blockchain technology.

Food Safety and Quick Recalls

The Centers for Disease Control and Prevention estimate that each year roughly one in six Americans, or 48 million people, becomes ill as the result of a foodborne pathogen (e.g., salmonella, listeria, or E. coli). Blockchain technology will not necessarily prevent outbreaks but could be used to track their source more quickly and prevent outbreaks from becoming epidemics. Retailers and regulators could use the distributed ledger technology for accurate and rapid information about potentially contaminated food.

Walmart is pioneering the use of blockchain to maintain easily accessible records of food provenance. In a simulated recall, The company was able to trace the origin of a bag of sliced mangoes in 2.2 seconds compared with the 6 days, 18 hours, and 26 minutes it would take using a standard approach of working with suppliers.

Australian exporter InterAgri is experimenting with using blockchain to track the production and global delivery of its Black Angus Aussie Beef. Teaming up with JD.com, a major e-commerce site in China, InterAgri aims to detect and eliminate food fraud such as counterfeit Aussie beef illegally marketed in China. By some cost estimates, food fraud affects approximately 10 percent of all commercially sold food products, creating food safety concerns for the consumer and liability issues for producers.

Coming to a Shelf Near You

In principle, blockchain could be applied to tracking provenance information for virtually any good, from agricultural commodities to luxury goods. Although blockchain technology is still not prevalent or the industry standard, more producers and retailers are exploring ways to track their own supply chains to increase quality assurance and their ability to communicate information about their products to consumers.

It will take trial and error and significant work with suppliers to ensure interoperability and efficiencies, but such experimentation will be essential if the U.S. and global economies are to realize the benefits of blockchain in international trade.

This is the first in a three-part series by Christine McDaniel for TradeVistas on how blockchain technologies will play an increasing role in international trade.

ChristineMcDaniel

Christine McDaniel a former senior economist with the White House Council of Economic Advisers and deputy assistant Treasury secretary for economic policy, is a senior research fellow with the Mercatus Center at George Mason University.

This article originally appeared on TradeVistas.org. Used with permission.

Brazil’s Banco Bradesco Confirms Blockchain Integration

Bradesco Bank – the second largest private bank in Brazil, released information confirming the integration of the Marco Polo Network. The global trade finance network combines R3’s Corda blockchain technology and the TradeIX distributed trade finance platform to create a unique, paced process for financial institutions to utilize.

Marco Polo’s Network gives banks and other financial institutions the advantage of learning and exploring opportunities in blockchain technology prior to implementing strategic trade finance initiatives with the platform.

“Facilitating financial inclusion and supporting economic growth is one of our key priorities. Following the successful digitalization of our retail services, we’re now focused on leveraging the best technology to develop new trade finance solutions for our corporate banking customers,” said Roberto Medeiros, Bradesco’s Head of International and Trade Finance in the announcement.

“Our Research & Innovation Department carefully assessed the options available to implement blockchain solutions and APIs. The expertise of the Marco Polo Network, the forward-looking vision and the end user-focused approach convinced us that we had found the optimum place to succeed,” he added.

With a focus on improving trade finance by increasing transparency, connectivity, and optionality, the joint finance initiative provides solutions and efficiencies to minimize financial roadblocks while maximizing client and partner relationships.

“As Marco Polo’s global network continues to grow momentum, it is clear that it is bringing tremendous value to the trade finance and working capital sector. Institutions which get ahead of the curve by engaging actively with blockchain technology now through use-cases and pilots will be ahead of the curve and gain a significant competitive advantage. Banco Bradesco is joining a network leading the way in exploring how blockchain can improve the entire trade finance lifecycle,” said David E. Rutter, CEO of R3.

Source: Marco Polo

Blockchain Changes the Pace for Agricultural Supply Chain

Farmers and buyers are now provided streamlined visibility for their deals through the new blockchain platform, Grain Discovery. As a result of the start-up technology, the first global corn trade transaction was successfully processed for Prince Edward County farmers Larry Reynolds and Lloyd Crowe following the discovery of vomitoxin beyond the threshold for corn and leading to rejection of two loads. The two were in need of a quick and reliable solution to locate a new buyer and process the transaction. Grain Discovery did just that.

“By using Grain Discovery, we were not only able to avoid hours of searching for a new buyer, but found one just down the road, at a better price than the original deal, and were paid instantly,” said Mr. Reynolds. “If blockchain technology means a few extra dollars in my pocket and a few hours less trucking, then that’s a win.”

The goal for Grain Discovery is to create a revolutionary approach to agricultural supply chain through the use of blockchain technology while providing increased visibility, control, and simplicity for farmers and buyers.

“Farming technology in the agricultural industry is incredibly advanced,” explained Rory O’Sullivan, CEO of Grain Discovery. “However, the way grain is bought and sold hasn’t changed much since our grandparents were farming! In the age of Amazon and eBay, we reckoned the industry deserves better.”

“We are participating in a number of other pilot projects this year, including tracing soybeans from seeds in Canada to the export market in Japan and coffee from Columbia to your local café,” said Mr. O’Sullivan. “This transaction was the vital first step towards realizing our goals.”

Source: EIN Presswire