I take my coffee black, with two sugars and the blockchain?

The blockchain could change the coffee supply system as we know it

Blockchain this, blockchain that. It’s talk of the town at the moment.

Searches for blockchain content are going through the roof and its certainly the latest buzzword on the block. But with growing scepticism around the validity of cryptocurrencies, it’s easy to lose sight of the real potential this technology has. And oh, how there is potential…

If you’re not entirely sure about the blockchain, lets clear something up.

The blockchain isn’t cryptocurrency. Well, it is, but also, it really isn’t. You see, cryptocurrencies that we read about in the newspapers, with their volatile rise and fall in value aren’t a true reflection of what the blockchain can really achieve. It’s merely a ripple in the ocean. It’s merely blockchain 101.

Cryptocurrencies use blockchain technology but that’s where the line must be drawn. There’s far more to come.

Take the coffee supply chain, for example.

The coffee supply chain is in desperate need of reform. It’s been band-aided so many times that we’ve stopped even questioning what type of coffee is fairly traded, or where it’s come from, or whether the farmer is ethically managed.

Coffee? Blockchain? Huh?

Let’s strip things back for some of you who are just getting on board with the whole blockchain idea.

Let’s say you wanted some baseball cards and lets say you had a friend (both entirely plausible).

And, your friend, lets call him Jimmy, had those exact baseball cards you needed. Jimmy wanted $30 for his baseball cards and you felt that was a fair price, so person-to-person, you gave Jimmy the money and he gave you the cards.

But there’s a problem.

The next day, Jimmy asks for the money again and despite the fact you know you gave him the $30 dollars, you can’t prove it, which leads to all kinds of disputes, Jimmy calls his mummy, things get ugly. Let’s leave that version there.

Let’s replay the whole Jimmy story, same situation, same cards, same money but this time, add your mutual friend Frederick. Now Frederick validates this whole baseball card trade thingy. He witnesses you giving Jimmy the $30 in return for the cards and even makes you both sign your names, to ensure no disputes happen.

But there’s a problem (dammit!)

Frederick wants some cash for his time and effort, $5 worth of cash, which you might say is fair enough. But this slows down the baseball card trade and also means Jimmy is certainly not getting a fair price for his baseball cards. Why should Frederick be paid for something that was never his? Add in your other friends Nicholas and Jane, who also need to authenticate the cards and handle the swap, and Jimmy certainly isn’t getting a fair price because they charge $10 each! Most of your money has gone to your other chums!

So, there are your problems. The first version makes more sense without the middle-man but without that middle-man, how can we possibly prove anything changed hands?

That’s where the blockchain comes in.

Let’s replace Jimmy and the baseball cards with a coffee farmer and some wholesome coffee beans and it begins to make sense. You want your beans, the farmer needs to earn a fair living, but there are too many middle-men preventing that from happening. They take the lion share, not the farmer.

Swap out your friends Nicholas, Jane and Frederick for coffee processors, roasters and financial organisations like a bank, and the picture becomes much clearer. There’s not much left for the farmer.

The blockchain would allow for a contract directly between farmer and customer, meaning no middle-men, no cut prices and a fairer, more sustainable coffee process.

The blockchain allows for something called a ‘smart contract’ that can be set up between you (the customer) and the coffee farmer.

How can the trade be validated?

Ah, well that’s the clever bit. Everyone who ever performed a trade with that particular coffee farmer would have a copy of every trade with that coffee farmer. Make sense? It’s like every customer has a copy of the contract, so you can prove how many beans changed hands for which price and at what time.

So, the next time you’re enjoying a cup of joe, give a thought to farmer Jimmy (but not the baseball cards, that was just an example, forget that) and how the blockchain could really provide a fairer more just coffee supply chain.

If you’d like to find out more about truly fair trade coffee and how the blockchain can reform the worlds most traded commodity, check out the cofe project https://www.cofe-project.com/