A Note on Cryptocurrencies
Cryptocurrencies are an internet-based medium of exchange that use cryptographical functions to conduct financial transactions. This is done by leveraging blockchain technology to gain decentralization, transparency, and immutability. The decentralized nature of the blockchain makes cryptocurrencies theoretically immune to the old ways of government control and interference.
As of 2020, the most recognized name in the industry is Bitcoin, accounting for $188 billion dollars of the total market capitalization. Along with it, there are over 5,000 alternative coins currently traded in the international market. This market’s capitalization scratched the $800 billion mark in January of 2018, before crashing down to $100 billion before the end of that year.
During the time of the crash, many people pointed at all the flaws they could find with cryptocurrencies, their lack of usability, inherent risks, and price instability. It seemed as cryptos where a fad soon to be thrown away, but soon after that, the market started to climb back up, and within a year it had tripled its value.
Blockchain technology exists in many forms, and allows virtually all industries to run on it, including agriculture. Farmers will soon realize the benefits that blockchain technology provides for improved transparency, supply chain supervision, and financing. Among other options, farming businesses can use blockchains to optimize mobile payments, transaction fees, and credits. They can also use the technology for absolute transparency and transaction monitoring.
Cryptocurrencies can also be used to rise funds for agricultural projects. As an example, we can look at Bananacoin. This company uses a crowdfunding model where digital tokens are issued in exchange for investments. This allows backers to invest in the business of banana production and expansion, and become holders of Bananacoin tokens (BCO). Each token is pegged to the export price of 1 kilogram of bananas in the international market. The tokens are issued with the aim of raising approximately US$ 7.4 million dollars to produce Lady Finger Bananas in Laos.
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Acknowledgments
