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.