Could Blockchain help in overcoming the challenges in commodities trading?

Global production and consumption of sustainable products (e.g. cocoa and bananas), is increasing rapidly. Indeed, the value of trade across listed agricultural and seafood commodities is worth in excess of £35 billion. Organisations are increasingly buying into this agenda. For example, in 2014, the cosmetics and beauty giant L’Oréal committed to sourcing 100% of the renewable raw materials it uses from sustainable sources, as well as a goal of ‘zero deforestation’ by 2020.

However, this rise in trade and consumption is not without its challenges. For example, as is the case in all commodity trading, there is significant price volatility in the markets (see graphic below).

Commodities have been on a roller coaster ride for the past couple of years due to a surge in demand (and subsequent slowdown) from emerging economies, such as India and China, and an increasingly strong dollar. For example, prices for industrial metals (e.g. nickel and copper), fell by almost 40% in 2015 due to decreased demand from China. Another challenge lies in the disparity of the markets. For smaller producers, the capacity to produce for sustainable markets more often than not tends to be concentrated in more developed, export-oriented economies. This is so simply because it is easier to do business where there is better infrastructure and governance. There are some exceptions to this general rule, including cocoa which is largely produced in less-developed economies such as the Ivory Coast and Ghana. Another exception is cobalt, the largest producer of which is the Democratic Republic of Congo, even though around 1/3 of the global market is controlled by the minerals giant Glencore.

Overcoming these challenges requires innovative approaches. Internally, one strategy might be through the use of Porter’s value chain analysis (i.e. the range of activities in taking a product or service from conceptualisation to delivery). Through this approach an organisation examines its production processes (i.e. its primary activities – e.g. marketing, operations, logistics, and support activities – procurement, technology development and human resource management), and identifies where improvements can be made. If the organisation is competing through differentiation advantage it will try to perform its activities more effectively and efficiently than its competitors. If it competes through cost advantage, it will try to perform internal activities at lower costs than its competitors, and therefore enhance its bottom line and competitive advantage.

However, it is in the trading of the commodities that there are significant opportunities for innovation to address the challenges. Blockchain, the method of recording data in the form of a digital ledger of transactions is one such innovation. Indeed, if traders started sharing data using a tailor-made version of Blockchain it could remove a lot of manual processing, smoothen the volatility, speed up transactions (thereby reducing costs), and overcome infrastructure and capacity differences (thereby leading to some rebalancing of the markets).

Various examples already exist. For example, the technology company Everledger is using Blockchain to develop a system of warranties that enable mining companies to verify that their rough-cut diamonds are not being used by militias to fund conflicts, and that they comply with the Kimberley Process – a government and community-backed certification scheme for diamonds. In 2015, the investment bank Goldman Sachs and Chinese investment firm IDG Capital Partners invested £35 million in Circle Internet Financial, a start-up to exploit Blockchain technology to improve consumer money transfers. Similarly, the tech company R3 CEV has developed a consortium, including more than 40 global banks (e.g. Barclays, UBS and Wells Fargo), to explore the use of distributed ledger technology. Therefore, the rise in resource consumption has brought with it challenges. However, innovative strategies to address these challenges do exist.

Blue Light Services: Measuring Impact and Forecasting Intervention Solutions

The CCEG Blockchain UN Lab is developing Software-as-as-Service (SaaS) platforms for real life usage by organisations, institutions, governments and individuals to aid and  resolve intractable problems in society. Since 2011 we have been the main provider of public sector  solutions for Social Value Act 2012 and for corporates for the Modern Slavery Act 2015.  This new system aims to …

  • Measures impact of current interventions
  • Visualizes the impact in 3D across the region
  • Handles multiple agencies simultaneously eg. fire, police, health, employment, etc
  • Reports the impact in the framework of your choice
  • Can predict and used for modelling ‘what-if’ interventions
  • Demonstrates for commissioning different impact and agency options
  • Provides a solution for empowering unaligned, disaffected and hard to reach groups
  • Integrates with existing live command and control agency systems

 

Intangible Value Blockchain + xAPI + OpenBadges = BadgeChain

What if you knew? What if you knew that the effort you put into something actually had value beyond the immediacy of completed task?

What if the effects of that task could never account for an ROI? What compels us to even start that task, that project, that strategy if we can’t possibly know the benefits, the beneficiaries or the positive change that we could be affecting and effecting?

How would our stakeholders react, and how do we know it is benchmarked against what our competitors (or rather a collegiate for change) are doing beyond marketing and media kudos, and into real, significant impact – the value of intrinsically motivated efforts to add value, not to wealth, but to the value we can bring to society?

How would we possibly start to turn that value into data that we could then start to manage, analyse and make actionalbe and data-informed decisions on?

We’d need a common language, a common means to express and represent our activities, that of our agents of change, and that of the recipients and beneficiaries of the change we are facilitating.

That language exists, and it’s called the Experience API (or xAPI for short), and is already underpinning aspects of the OpenBadges movement – where intellectual currency may be in it’s infancy (seen as some as extrinsic motivators for learning), but the recognition of educational transactions across diverse and ubiquitous learning environments is becoming a common outward expressions of intrinsic desires to develop and grow, published for all on LinkedIn profiles (for more information, please take a look at BadgeChains –

If you want to know more, you’ll need to follow this project – not to be given the answers, but to be participants of the change in the way that activities which generate intangible value can be represented as a simple yet powerful statement: [Actor] [Verb] [Object] – [You] [Read] [Blogpost on IVBxAPI], [You] [Searched] [What is xAPI], [You] [Completed] [#LearnxAPI MOOC by Curatr], [We] [Started] [Intangible Value Blockchain project using #xAPI]…

We are reaching out to teams such as http://makingbetter.us/ (https://twitter.com/mkngbttr – setup by Aaron E. Silvers https://twitter.com/aaronesilvers and Megan Bowe https://twitter.com/meganbowe )to raise the knowledge and power of the Experience API from specification to application for the better good.

With your help, we can make the statement [Intangible Value Blockchain with xAPI] [Started] [Positive transferable change to Society].

Jim Harris is a Learning Designer at The Univeristy of Northampton – follow me here: https://twitter.com/JimDHarris