Innovative blockchain-based start-up Cardano has signed a memorandum of understanding (MOU) with the Ministry of Science and Technology of the government of Ethiopia, for agri-tech development using the promising distributed ledger technology (DLT). The MOU has special focus on coffee growing in Ethiopia.
Rural farms and small holdings grow 95% of the coffee in Ethiopia, a country famous for its coffee. One of the key concerns holding back further growth in this sector is the lack of transparency with respect to the supply chain. Proving the origin of the coffee and tracking its movement from the rural farm to the wholesale buyers has been hard.
Blockchain, with its promise of decentralization and immutable records, have been quite useful in supply chain assurance. It’s a distributed database, where computers on the network, also called ‘nodes’, maintain a shared version of the truth. Every node has complete information on the blockchain. In effect, every node has a complete ledger of all transactions, which is why it’s called DLT. There’s no central server, which, if destroyed, will help the hacker destroy the entire network. Also, adding new block records, called ‘blocks’, require solving complex cryptographic puzzle, and consensus mechanism ensures that only approved transactions get recorded in the blockchain. These features make blockchain very secure.
Cardano plans to use blockchain to record every touch-point in the coffee supply chain. The coffee buyers can verify the purity and origin from the blockchain data directly. Regulators can also make good use of the system, since they can track factors such as amount of pesticides used. The platform will also be used for making payments and disbursing loans to the coffee growers. The company uses a proof of stake (PoS) consensus algorithm, which is less energy intensive than proof of work (POW) algorithm. Their crypto token ADA is 7th in terms of market cap.
Cardano, founded in 2017, and the parent company IOHK, also have other plans for Ethiopia. Charles Hoskinson, CEO and founder of Cardano, believes that blockchain can help people in Ethiopia significantly in managing their land records. The tamper-proof network will ensure that land owners won’t be in a disadvantageous position when they try to prove their land ownership. The company also has plans on training Ethiopian developers on blockchain, and considering Hoskinson was one of the co-founders of Ethereum, that could be a really good deal for the Ethiopian youth!
Blockchain is increasingly becoming important for supply chain assurance, for e.g.:
- Norway-based risk management company DNV GL has partnered with VeChain for powering their risk assurance business with blockchain;
- American retail giant Walmart will use blockchain to track supply chain for their live food business;
- Tech giant IBM has built TrustChain, in partnership with leading jewelry companies, to track supply chain of precious gems.