One of Colombian’s most famous, and delicious exports is coffee. For many years now it has remained a high demand industry, with a very intricate supply chain that is critical to the Colombian GDP. With over 2 billion cups consumed a day, Colombian Coffee will continue to be a profitable sector for a very long time.
Even though 90% of the world’s coffee is produced in developing countries, it has not been a reliable source of income for many farmers. Economic issues such as limited market access for producers, lack of product and market information and depreciating market prices all contribute to supply chain problems that farmers face every day. General market prices of coffee do not always reflect the quality of an individual’s Colombian coffee crop, or their personal financial situation.
On top of that, there are a number of large Colombian coffee companies that claim to be engaging in fair trade, when in reality they purchase their coffee through other middlemen. Exporters and middlemen generally get an extra cut from this transaction, while the farmers rarely do. For these reasons, farmers rarely receive fair compensation both for their labor and for the value of their Colombian coffee product.
The Colombian coffee supply chain can be broken down into a large complexity of parts:
The Commodity Fairness Index measures fairness for members of a commodity supply chain by evaluating degrees of imbalance. For example, the index showed that almost 90% of Colombian coffee producers are capturing less than 5% of the value created by their coffee. If other developing countries have similar levels of inequality in their coffee supply chain, then thousands of producers are being undervalued and under paid for their labor.
"Redesigning the coffee supply chain to increase transparency, efficiency, and win-win economic transactions can help to rectify this situation. Blockchain in the coffee supply chain can help growers see where their beans end up, and enables consumers to see where their coffee comes from. This technology can help ensure that growers are given fair payments for their crops and are maintaining sustainability practices. And it can allow consumers to make more informed decisions about where they should purchase their coffee."
Some believe that economic loans or social programs are the best way to help farmers through this dilemma. But in reality, it only masks the systemic supply chain issue. It would be more equitable to create a system with blockchain that enables farmers to make a fair profit as a member of the Colombian coffee supply chain and rectifies imbalances through full transparency and traceability, rather than be taken advantage of for profit.
Head of Operations, Blocolombia
The growing demand for Blockchain in Colombia and cryptocurrency is leading to new endeavors and pilots in the country among young Colombians. This is spurred by the current fears in Colombian politics, economic failure to fully recover after the pandemic and a peso at risk of collapse. This has created the perfect environment to test new financial products and services to offer Colombians. The Banco de la República of Colombia is doing just that.
The IDB Group and Banco Davivienda have launched a bond pilot that will be issued, placed, traded and settled on blockchain technology. They will utilize the power of smart contracts to legitimize this to be placed on the Colombian stock market. This pilot will be the first of many steps towards the implementation of the technology in capital markets. Davivienda will issue the bond and IDB Invest will subscribe the entire issue. This is a big bid to help grow interest around Blockchain in Colombia and ignite the industry.
The benefits of this blockchain bond pilot include the potential for reduction of operating costs, optimization of processing times, greater traceability, elimination of misinformation and better financial risk management practice. This can all contribute to a more efficient and integrated securities market in Colombia without exposing the protections of investors.
The Banco de la República expects to act as an observer node in the blockchain network. They are participating in the experiment in order to better understand the process of issuing and trading securities in a decentralized manner with Blockchain in Colombia. They also want to better understand the effects on the primary and secondary market, including the challenges and regulatory needs to improve upon a blockchain-based bond, among other potential financial products in the future.
Davivienda has already become the first bank to apply advanced blockchain technology to guarantee the security, monitoring and transparency of its products and services. The bank has made significant investments in infrastructure, guaranteeing users a trustworthy, friendly and transformative experience. Davivienda is looking to set a benchmark for digital banking in the region and lead this path of integrating Blockchain in Colombia.
Colombia, and the entire Latin region, has a long way to go before they can call themselves a blockchain-based country, or even a technologically advanced nation. But despite the lack of proper infrastructure and government policy, that hasn’t stopped the surging growth in demand and the foreign investment that is pouring into Colombia to see these changes come to fruition.
Over the next 5-10 years, you will likely see regulators step back or introduce friendlier laws that encourage innovation around Blockchain in Colombia. Colombia has come a long way in the past 10 years already and there is much to be excited about in the years to come if the Colombian people keep pushing forward and the Banco de la República continues to favor the adoption of Blockchain in Colombia alongside similar technologies and various other financial institutions.
Head of Operations, Blocolombia
Okay, there's a lot I want to unpack here for this blog post... so let me grab a drink. In the meantime, here's a picture of Vancouver!
So I recently took a trip to both Vancouver BC and Whistler Blackcomb, a trip that I usually make once a year. Other than the amazing scenery, fresh air, and friendly disposition of nearly every Canadian, I continually notice a unique racial demographic. And yes, this has a lot to do with the point I'm going to make regarding Bitcoin. Let me break this down.
Let's start with Vancouver. Almost everywhere I look, I see individuals of Asian descent. More specifically, I see a lot of Chinese. Even more specifically, I see a lot of Chinese buying up the skyline of Vancouver. So they are living and investing heavily in the city. With that comes Chinese customs and technological demand, the same demand that they have in Shenzhen, Beijing, and Hong Kong (yes, H.K. is kinda China).
Okay, so why the hell does this matter? Well you'd understand if you've seen this video:
Seriously, watch this video so you can understand my point here. The Chinese are all MOBILE! They don't carry wallets or accept fiat for payment. They use Alipay or WeChat instead. So what did I see everywhere I went in Vancouver? That's right! I saw Alipay and WeChat. The reason I bring this up, is that in North America, we lag behind Asia in almost every technological arena. Especially when it comes to finance.
Vancouver serves as a fantastic example of where North America is heading. This leads into my main point regarding Bitcoin. There is a high likelihood that North America bypasses the retail banking shift, from banks to big tech, entirely and instead goes mainstream with cryptocurrency, like Bitcoin. You can thank the Chinese people for driving tech demand, and we'll likely see Bitcoin widely accepted in Vancouver long before the rest of the continent catches up.
Regarding Whistler, I saw the same thing, but in a more relaxed and suburban/rural setting. With Whistler Blackcomb being home to one of the biggest ski resorts in the world, it could be a fantastic launch pad and test case for cryptocurrency adoption. Not to mention the need for better efficiency, which blockchain could provide for hotels, ski lifts, restaurants, rentals, etc etc.
Well, that's my mini rant. Here's a picture of me at the top of Mt. Whistler looking cool.
These are just some things I keep noticing that may one day bring my ideas into fruition. Hopefully in terms of blockchain. Looking forward to a decentralized world.
One of the best parts of recording a podcast, is the people you meet. I can't emphasize that more. Over the past 2 months, I've had numerous guests on the podcast that spoke about Crypto Art and how much blockchain is changing the way we look at art. Jess Houlgrave, Jonathan Perkins, and Fanny Lakoubay were absolutely awesome, and really expanded on the benefits of blockchain. From verifiable ownership, to royalty protections for creators.
I really enjoyed learning from these individuals and began enjoying art myself; I'm often an analytical machine. But the home run hitter was Josie Bellini. Not only is she a popular, up-and-coming artist in the crypto-verse, but she paints the symbolism that we often forget Bitcoin stands for.
Bitcoin wasn't a random incident. It came in the wake of the 2008 financial recession, which saw great frustration among the populous for the ignorance of the "too-big-to-fail" banks. The idea of money was finally being questioned, and people were getting sick of corruption. Then, miraculously, Satoshi Nakamoto released a whitepaper for a peer-to-peer payment system called Bitcoin.
This anger and frustration that Bitcoin was born out of is what you see in Josie's artwork. The notion that fiat is inflating, governments increasingly can't be trusted, and that people are being stripped of their sovereign rights as individuals. On the podcast, I had the chance to explore these complex meanings with Josie and in her artwork. The fact that her artwork isn't just an abstract creation, but rather a careful message, gives me faith that the longevity of this new innovation will go on. I'm more bullish than I've ever been.
As Thomas Jefferson once said:
"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
Last week, Brock Pierce bought a home for $1.2 million using Bitcoin. But listen, this is nothing new. Or is it??
Every now and then, we hear of some crazy purchase made with Bitcoin or another cryptocurrency. Yeah, it's interesting. Yeah, society still isn't tailored to accepting crypto as a payment. But that's what makes purchases like this kind of cool to hear about. So why am I talking about another random purchase with Bitcoin? Well, because it's not that simple, and it's brilliant.
Brock Pierce didn't just buy a very expensive home with Bitcoin, he loaned the money to himself. Okay, yes, it sounds a little different. But let me break down why this was brilliant, and how I'm doing the same thing on a much different level.
Nexo is a company that allows you to borrow against your own crypto, up to $2 million dollars or something crazy like that. Using a loan-to-value model, you can borrow the money you need, payment almost nothing in payments (other than interest), and still HODL your hard earned crypto.
Sure, Bitcoin could collapse and you might lose your collateralized Bitcoin. Unless... you use it to buy another asset. This is where my genius kicked in.
Sure, buying a house is reasonable, but he wants to live in it, and make it a liability, not an asset (thank you Kiyosaki for the wisdom).
Instead, why not reinvest? That's what I'm doing. I won't stay how much or how little, but why not leverage your crypto to buy more crypto! Or even better, stake that crypto! Or even better than that, invest in NFTs (Non-Fungible Tokens). Guys, this is a wide-open market and Nexo is giving us a blessing to invest heavily, especially when we are close to another bull market cycle.
I'll just say this. ICOs were a boom. Futures contracts were a boom. Mining even drove the market for a long time. But Dapps and Staking, these will be massive market drivers and that's where I would put my money right now.
Excuse me, my crypto-backed loan.
I remember this exact moment last year. I was in the process of launching my book "The Satoshi Sequence" and a mining company. So much was escalating in the crypto sphere it was almost suffocating. I was fortunate to have been vocal about Ethereum at the time. In fact, I had my finger on the button 2016, saying that Ethereum was ushering in a 2nd Generation of blockchain tech. In 1 year, I watched Ethereum rocket up from $7 to over $1200 by the end of 2017. That was incredible to be a part of.
With that said, 2018 has been the polar opposite. It's funny how the same people that I knew in 2017, that were rushing to buy crypto on Coinbase, are now running away from crypto at the same frantic pace. That's how I know this market is young. The lack of education has prevented many people from adopting the technology. Including major institutions.
Despite the doom-and-gloom of 2018 and the market bloodbath, there is 1 project that has stood out to me, which is Pundi X. Great team, deflationary revenue model, built for scale, and producing physical products (e.g. XPOS and XPhone). The advent of products and services being coupled with blockchain will drive adoption much faster than any financial instrument. I have been saying this for a long time. Blockchain is a new technology, and it will only be understood when our generation can interact with it. I'm talking Online Gaming, Storage, Smart Contracts, Dapps, Encrypted Communication, Verified Voting, Autonomous Organizations, Monetization of Personal Information, etc etc etc. I could talk about this forever.
For now, enjoy this picture of a Z9 Mini sitting on top of Pundi XPOS boxes.