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How The Blockchain Can Fix A Supply Chain Problem In The Tequila Industry 7 678

Looking beyond Bitcoin, Ethereum and the scores of other cryptocurrencies we hear about every day, takes us to the ground-breaking technology behind it. The blockchain not only has the power to create digital gold and facilitate international money exchanges; it can also be used to remedy problems in the supply chain. And, specifically, within the tequila industry. Let’s take a closer look.

The Problem With The Supply Chain

There are many problems with the supply chain currently, not least that it creates a large number of links and exchange of hands before the product reaches the consumer. Not only does this push up the end price, but it also gives the seller less control over what happens at each link in the chain.

Agricultural supply chains, in particular, involve many phases and widely dispersed geographical regions. This makes it hard to investigate incidents, such as environmental issues or damage, and adds the additional problem of language barriers, cultural issues and, of course, currency exchanges. The resounding lack of transparency further makes it impossible to evaluate the true value of the produce that we purchase.

Illicit activities, such as child labor, substandard conditions in factories, or even revenues being used to fund criminal activity are also extremely hard to control when there are so many stakeholders involved.

The Alcoholic Agricultural Industry

The team at AgreCoin is recognizing these problems in the supply chain and the woeful inefficiency of the agricultural industry. The mechanism responsible for feeding the world’s growing population should not be losing money hand over fist. The wine industry is a case in point. Winemakers lose billions of dollars every year in damaged assets and production losses, and tequila farmers experience similar problems.

Alcoholic agricultural products have profound boom and bust cycles, leading to farmers ending up with too much product, or facing serious shortages. In the case of tequila in particular, it is only produced in Mexico and the agave plant used to make it takes eight years to mature. But with a steady global demand for tequila, supply cannot keep up. That, coupled with environmental issues, such as unseasonal weather damaging plants in parts of Mexico, leads to increased chinks in the supply chain.

How The Blockchain Can Help

The blockchain as a distributed ledger can help make great strides towards controlling and regulating the supply chain, avoiding lack of knowledge and mark up at each stage. The nature of the technology provides transparency and security, as the ledger is publically available and every product can be traced back to the origin of the raw material.

Each stage of the supply chain can be documented and cannot be tampered with at any point. Applying the blockchain would serve to identify all parties involved in the supply chain and track and record important data, such as prices, dates, shortages, and the quality of the product at each stage.

One of the blockchain’s major advantages is that it is decentralized, which means that no one person would have ownership of the ledger. Cryptography-based technology further makes the ledger impossible to manipulate, tamper with or change in anyway. The blockchain is unhackable, at least currently.

AgreCoin believes that the blockchain efficiencies would allow millions of independent farmers to more effectively handle supply and demand and reduce unnecessary losses. A futures exchange for liquor related agricultural products would be the vehicle used to eradicate the problems.

Furthermore, the use of cryptocurrency would allow providers in different locations globally to trade in the same currency. That includes workforce, transporters and financial intermediaries. They would sign and use smart contracts using blockchain priced and settled in AgreCoins.

Removing transaction and conversion costs would drive down the end price of the product. Having an untamperable record of every stage of the supply chain would avoid wrongdoing, markup and waste.

The blockchain has the potential to fix problems in the supply chain industry wide and improve conditions for producers, workers and consumers. This will eventually change the way we purchase and consume goods. Transparency and security will help make our economy safer, remove dubious practices from the equation and ensure that we’re never worried about a shortage of tequila shots at the bar.

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Bitcoin Uses As Much Energy As Austria, Could Add 2°C to Earth’s Atmosphere 2,182 10489

Photo by Lucy Chian on Unsplash

Bitcoin mining, it turns out, damages the earth more than more traditional environmental assaults like actual mineral mining.

According to a paper published Monday in Nature Sustainability, the power-hungry Bitcoin mining process consumes more than triple the amount of energy needed to mine the equivalent amount of gold, more than quadruple what’s needed for copper, and more than double what it takes to mine platinum.

Other coins didn’t fare much better. By their measurements, Ethereum and Litecoin consume 7 megajoules of electricity to produce the equivalent of $1, the same energy expenditure as copper mining but more than that of platinum or gold. Monero eats up 14 megajoules to produce $1.

Naturally, these measurements refer to the notoriously variable dollar valuations of such tokens. “While the market prices of the coins are quite volatile,” write researchers Max J. Krause and Thabet Tolaymat, “the network hashrates for three of the four cryptocurrencies have trended consistently upward, suggesting that energy requirements will continue to increase.”

Bitcoin’s Growing Electricity Bill is Bigger Than Some Countries

We’ve long known that Bitcoin is unsustainable. In a 2015 article for Motherboard, Christopher Malmo pointed out that a single Bitcoin transaction used 5,033 times as much energy as a Visa swipe, and could power 1.5 American homes for a day.

The electricity used to crunch Bitcoin code—and its environmental cost—has been growing with its increasing popularity. Digiconomist’s Bitcoin Energy Consumption Index shows Bitcoin currently consuming 73.12 terawatt hours (or 263.232 billion megajoules) of electricity annually. To put that in context, it’s comparable to the amount of energy it takes to power Austria for a year.

That means there are 175ish countries on earth using less energy than Bitcoin (to say nothing of crypto on the whole), while 66 countries consume less energy per capita than one Bitcoin transaction (it takes 94 thousand kilowatt hours of electricity to mine a single Bitcoin).

Iceland, a major hub of Bitcoin mining farms, spends nearly as much energy on Bitcoin as it does powering its residential homes. In this case, the damage is mitigated because most of Iceland’s power comes from renewable energy.

Canada’s Bitcoin emissions are also on the lower end due to renewable energy sources. They’re using this to court mining companies from China, where mining emissions are about four times that of Canada’s. Montreal International attracts foreign investment by calling Quebec the land of “green bitcoin”. This has caught the eye of some Chinese mining companies looking to go overseas as the Chinese government has discouraged expansion and shut down some mining operations altogether.

Depending on Bitcoin’s growth, some have projected that it could use as much energy as the entire world by 2020.

Digital Currency Has a Real Carbon Footprint

Krause’s and Tolaymat’s research reminds us of the sobering reality that all this invisible wealth has real world costs.

For the 30 months they measured between January 2016 and June 2018, they estimate their four featured tokens collectively belched out at least 3 million tons of CO2 emissions, possibly as much as 15 million tons.

These findings follow another study, published last month, which determined Bitcoin alone could add two degrees Celcius to global warming within the next three decades. That’s enough to raise ocean acidity by 29 percent.

Solving Bitcoin’s Energy Consumption Crisis

So what is the solution? If the world were to switch to 100 percent renewable energy overnight, the problem would be moot. But we can’t hold our breath for that. There could be ways of incentivizing clean energy so greener mines reap more coins, or of implementing clean energy in other ways.

It’s also possible to adopt less computationally intensive mining algorithms so the mining computers don’t guzzle as much juice. This would disappoint a lot of old school Bitcoiners who have invested in hardware, but their feelings don’t really outweigh that 2 degrees celcius that everyone will have to live with (or die by).

Whatever the best solution turns out to be, something needs to change soon. Bitcoin is growing up, and it’s time for it to mature into something more sustainable.

Kenya Looks to Blockchain for Affordable Housing Project 9 9461

Nairobi, Kenya

The “Silicon Savannah” is moving deeper in direction of tech. The Kenyan government has announced a plan to manage the property allocation and funding of 500,000 affordable housing units with blockchain technology.

The units, which the government aims to build by 2022, will be set aside for households with an annual income below 100,000 Kenyan Shillings, about $990 USD. The World Bank estimates Kenya’s gross national income per capita at $1,290, according to Business Daily.

Blockchain will help ensure that the affordable housing is in fact going to those who fall below the average income bracket. Land title fraud has caused problems for Kenyans, as land grabbers target homes and even schools for illegal sales and development. Blockchain’s ability to store verifiable proof of title could help safeguard against fraudsters.

“Kenya will use blockchain technology to ensure the rightful owners live in government funded housing projects,” said Principal Secretary of Housing and Urban Development Charles Hinga, speaking with the World Bank on Monday.

Hinga said the plan will be financed by the National Housing Fund, which will raise over $59.5 million per month to get the project underway. But Cabinet Secretary for Transport, Infrastructure, Housing and Urban Development James Macharia said it will take $31.7 billion to build a million homes, each of which will cost between $3,000 and $30,000. Macharia called for support from private sector financing.

Under the financing plan, working Kenyans will contribute 1.5 percent of their salary, which will be matched by their employers. “On affordable housing one should not spend more than 30% of their disposable income for housing,” Hinga tweeted yesterday. “Anything above 30% is not affordable.”

A Trustless Relationship Between People and Government

The initiative represents a considerable push to solve housing and title problems for the nation’s lower income families. But how will the government decide to whom the housing units will go? With so much talk about financing underway, people are already calling on the government to outline a plan for how they’ll distribute the affordable housing units.

The government will need to deliver the housing projects in a time when, Hinga acknowledges, the public is skeptical. Earlier this year $78 million went missing in a corruption scandal involving the National Youth Services. Where there is little trust between the people and their government, Kenya hopes to establish transparency through the blockchain’s distributed ledger system.

Kenya’s Move Toward Tech

In March, Kenya’s Ministry of Information, Communications and Technology appointed a blockchain taskforce to explore the ways the nation could use blockchain technology in the public and private sectors. They called it the Distributed Ledgers and Artificial Intelligence taskforce, and by September its chairman, Bitange Ndemo, was calling on the government to tokenize the economy.

Ndemo also proposed government implementation of blockchain to certify the authenticity of retail goods, so consumers can be sure of where their food is coming from, for example.

Governor of Kenya’s central bank Patrick Njoroge has also voiced support for the use of blockchain technology to strengthen service delivery, although he’s opposed the use of tokens and digital currencies.

But the affordable housing initiative could be the Kenyan government’s first real world implementation of the blockchain.

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