Bitcoin and Agricultural industry: How does it help the economy?
Blockchain technology has become extremely popular in today’s day and age. While it was initially famous for developing cryptocurrencies like Bitcoin and ethereum, it has become more evolved.
Many supporters of blockchain technology believe that it can be applied in various industries such as health care trading and agriculture. It is essential to understand how blockchain works before understanding how blockchain technology or Bitcoin can be used in agriculture.
Blockchain enables transferring ownership or even value from one place or person to another. Simply speaking, it is made up of blocks that hold data that, once entered, cannot be tampered with. It is a public ledger system that your peer protects against peer encryption technology. Not only does the use of this technology make transactions more efficient but also more economical. Here are some ways the agricultural industry can benefit from Bitcoin and blockchain technology:
Improvement of the Organizational Power of the Supply Chain
It can be assumed that blockchain implementation will improve supply chain transparency, proving highly beneficial to farmers. The supply chain in the agricultural sector is not only very complicated but also too vague. As the shipment goes through various levels before reaching the consumer, transparency is lost in the process.
It is almost impossible to know from which farmer and at what rate the products were bought and are being later sold. This makes farmers vulnerable and primarily dependent on traders who can exploit them incessantly. Using blockchain technology can help record transactions as they are happening and provide updates about the supply and demand of items in real-time. Farmers can then put their prices and optimize the amount of product that needs to be moved for making the most profit.
Bringing More Financial Support to All Farmers
Cryptocurrency and blockchain technology can potentially change how farmers access money or deal with their finances, especially in developing countries. Many farmers suffer because they do not have access to adequate capital or cannot get their hands on capital affordably. With the popularity of cell phones, mobile banking has provided unique opportunities for such workers to improve their financial situation.
Even then, since there exists a blatant lack of transparency in transferring money, farmers have to pay extremely high transaction fees that become very costly. This can be solved by the use of cryptocurrency and blockchain technology. It not only excludes the need for paying transaction fees but also makes capital more affordable and accessible. This blockchain model has been adopted in various countries already.
Make Good Traceability a Reality
Consumers are now interested in the content and origin of their food. With the rise of veganism and mindfulness in food intake, people want to know whether their produce was organically made, whether the meat was substantially raised and more.
For produce to reach the farmer to the consumer, it has to pass through various hands, making food traceability extremely difficult. Dealers can then mislabel items and commit fraudulent activities without having to bear the brunt of it. However, with the evolution of Bitcoin and its application in the agricultural sector, food traceability can turn into reality.
Since the blockchain network can record information that cannot be tampered with, data regarding the food supply chain can be entered into the blockchain technology, providing reliable information about the origin of food items and how they have reached the consumer with more transparency. Consumers will then verify whether an item was grown in a specific farm claimed to be raised on. This can help not only the consumers but also the farmers in the long run.
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