The Blockchain Summit 2017 held on the 23rd of February, set out to explore the broad potential of blockchain technologies to disrupt a broad range of industries. A room of 200 delegates including start-ups, banks, corporations and tech advisors gathered to discuss opportunities for delivering better, cheaper and faster services using blockchain technologies.
AgriDigital’s CEO, Emma Weston, presented on revolutionising global commodity markets.
If you didn’t get a chance to hear Emma speak, here are some key take-aways:
Over the past 200 years there has been broad disruption and revolution to our commodity supply chains, through improvements in transport, production and processing advances, wars, and new technologies. While our world is now a lot smaller, we have also created long and complex supply chains. The number of intermediaries along the supply chain creates a disconnect between the primary producer and the end consumer. Increasing demands from participants along the supply chain for verified provenance data and supply chain transparency is calling this disconnect, and the overall structure of our commodity markets, into question.
Blockchain presents exciting opportunities to revolutionise global commodity markets in three main ways:
1.Securing and simplifying commodity management through asset tokenisation and smart contracts to auto-execute payments and processes. Through these tecnologies, we can create immutable ledgers of transactions for the sale of physical commodities, and ensure title transfer and payment occur simultaneously.
2.Blockchain and distributed ledger technologies provide opportunities to simplify and de-risk trade finance processes which are complex, highly manual and costly. For example, executing letters of credit on the blockchain not only reduces transaction costs and delay but also reduces the opportunity for fraud.
3.Provenance is set to have a major impact on how goods are traded and meets consumer’s increasing demands for verified data around where goods originate and how they are produced. Building robust technology and physical infrastructure will allow us to maintain the integrity of the supply chain and give consumers access to valuable data along the way.
Emma also elaborated on the challenges we face in pursuing these opportunities:
We need to be able to identify and verify not just people but also other actors in the supply chain such as machinery, trucks, and IoT devices.
We must develop new standards and governance models as existing frameworks aren’t set up to manage these new technologies.
Truly distributed ledgers will remove the high barriers to entry that currently exist at most points along the supply chain. We must adapt our organisations, systems and processes to the fundamentally different market structures of the future.
Transparency overall will have an unknown impact on market structures and behaviours. While transparency is normally seen as good for consumers, we cannot be sure how better informed players will use this information and operate along the supply chain. Price transparency presents even further questions as information and pricing arbitrage has been central to our commodity markets for a very long time.
These challenges and others are central to the work we do at AgriDigital.