Yesterday Texas-based blockchain platform GrainChain announced it had received $2.5 million in funding from Medici Ventures, part of Overstock.com. The startup disclosed that Medici owns 10% of the equity.
“We are making the grain transaction extremely efficient, transparent, safe and secure, and we’re giving not only the farmers but also the buyers a safe marketplace to do business in,” said GrainChain co-founder and CEO Luis Macias. “At the end of the day, we’re just leveling the playing field for the farmer, giving them much more power and control over the selling process.”
The platform uses smart contracts to secure funds during the transaction process, and also provides traceability. The use of Internet of Things (IoT) devices should enable more accurate measurements of weight. GrainChain was started by the founders of SiloSys which eliminates manual weighing and documenting agricultural yield.
The company claims that GrainChain “eliminates the potential of errors from human error or bad actors.” It may very well reduce the scope for errors and fraud. However, it’s difficult to eliminate every possible fraudulent scenario. If someone finds a way to game the system before the data gets on the blockchain, then that will be seen as the “true” data.
A large proportion of agriculture still comes from smallish farms who wouldn’t have the technical know-how or funding to implement this sort of technology. But some of the significant commodity players are putting systems in place.
For example, Agrocorp is rolling out a blockchain network to 4,500 Australian farmers. Separately, four of the world’s largest agribusiness companies plan to work together to digitize transactions using blockchain. The companies are Archer Daniels Midland (ADM), Bunge, Cargill and Louis Dreyfus.