Cryptocurrencies and Blockchain in Real Economy
Blockchain has left the realm of computer-only technologies to become some sort of a philosophic concept and a platform for business development with this vision being increasingly shared by developers, entrepreneurs, and even some politicians.
Last December, Russia’s Minister of Communications and Mass Media Nikolay Nikiforov said that blockchain technology had to be thoroughly researched for the benefit of the government.
â€śBlockchain technology as a new subset of technologies is very interesting because it has numerous use cases. In fact we’d have to check out how it can be useful for the government in terms of document protection. The technology may help the economy and develop relations between the government and an individual in other areas,â€ť he said.
Alexander Danilyuk, Ukraine’s Minister of Finance, seems to agree with his Russian counterpart. Speaking at recent All-Ukraine Blockchain Hackathon in Kyiv, he said:
â€śIn Ukraine, lots of things here are based on manipulation. Mistrust for authorities [is] related to the fact that we’re inside and can manipulate, so the thing is about changing the very mechanics of our work. Blockchain can help it!â€ť
But are there any real-life examples of blockchain applicability in real economy, like retailing, production, etc.? Even though the question itself looks somewhat pessimistic, there are positive examples.
One of the most prominent examples here is Kolionovo, a private farm near Moscow, Russia, that has partially integrated Emercoin blockchain in its routine operations and introduced Kolion, its own monetary tool.
Mikhail Shlyapnikov, the farm’s owner, has announced an open subscription and a reservation for 50 â€śsharesâ€ť. Each share is worth 24,000 rubles (or can be exchanged to the equivalent amount of goods, works or services) with circulation period of 12 months or more. These shares are backed by the farm’s assets.
In practical terms, it is about sending NVS records to the customer’s Emercoin wallet with network confirmation. The tool is applicable for external use as well, e.g. for converting fiat or digital currencies at an exchange.
However, Kolionovo is more of an isolated instance rather than a general trend, as blockchain’s main advantage is in obtaining information usually unavailable with traditional business tools. There’s a strong believe that blockchain is capable of purging dishonest entrepreneurs from the market. One of the best things about blockchain is that it’s applicable across various industries, be it food production, pharmaceutical manufacturing or rare earth elements mining.
Statistically, up to 30 per cent of all fish in the world is caught either illegally or using prohibited methods. In some countries illegal fishing accounts for 90 per cent of the entire yield. The seafood industry is also notorious for human rights abuses, and there’s hope the technology, piloted by a UK-based company Provenance, could help retailers, manufacturers and restaurants prove the origins of the sea foods.
The new blockchain approach sees fishermen send SMS messages to register their catch on the blockchain. This identification is then transferred to a supplier along with the catch, and any subsequent move, such as processing or tinning, is also recorded.
The information on the origin and supply chain journey of the fish can then be accessed and verified by end buyers and consumers in shops or restaurants using their smartphones, replacing the current printed communication and labels.
The technology has already sparked interest from food companies, with the Co-op Food group currently conducting its own trial with Provenance on fresh food products – expected to conclude later this year.
Trade and Services
Earlier this year state-owned Russian Post has announced its intent to use blockchain for tracking parcels. According to RodionÂ Shishkov, the company’s deputy director, blockchain could be the first step in winning back customer trust and making Russian Post’s operations more transparent, and delivery terms more predictable.
Raketa, Russian watch manufacturer, has also declared its interest in blockchain. The company says the technology (Emercoin blockchain in this case) could be used to record certificates of authenticity in an attempt to prevent counterfeit
The Kimberley Process, a UN-backed certification scheme initiated in a bid to clean up the diamond trade, is currently developing a solution somewhat similar to that of Provenance. A recent report indicates that the initiative is moving forward with its blockchain work aimed at preventing prevent so-called “blood diamonds” from entering markets as the revenue from their sale is used to fund African terrorist cells.
Taking all of this into account, it can be said that blockchain is gradually undergoing the test of sustainability and applicability in real economy. Also this means that there are plenty of challenges which lie ahead for the blockchain developers.
P.S. Already after this feature had been written, ForkLog learnt about Roman Romanyuk, a bee honey manufacturer from Lviv Region of Ukraine, who started selling his honey for bitcoins using Mycelium Gear. In the future, Roman plans to transfer the ordering onto Ethereum smart contracts. It may seem like a little thing, but in fact it’s all about bringing blockchain to smaller communities, so that the technology’s adoption could get closer to reality.
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