Whenever I talk about the implications of Bitcoin and other cryptocurrencies, I’m prone to get lost in the wonder. There are so many potential uses for blockchain technologies, the possibilities are truly staggering. Here’s a basic example of how Bitcoin can make a huge impact in the coffee industry.
Direct trade is a phrase many of us are familiar with. It refers to a set of buying practices designed to fairly compensate coffee farmers. It also, helps to ensure quality and promotes sustainable practices. It is done by eliminating middlemen between roasters and farmers, allowing the farmer to take a bigger slice of the pie. This hopefully leads them to live a better life. And it gives them the opportunity to reinvest more money into producing better coffees. Many 3rd wave roasters pride themselves on offering direct trade coffees. Furthermore, consumers get value from the sense of connection and duty to the farmers. Direct trade is about quality, fairness, transparency and sustainability.
Where does Bitcoin fit in? Well, when you have decentralized, peer-to-peer, borderless cash, you can cut a lot more middlemen…including the roaster. What if farms could sell directly to consumers in an open online marketplace? Or a subscription platform? Coffee could be auctioned, roasted and packaged in the country of origin. Then it could be shipped in bulk to various destination countries. From there, the bulk packages could be broken down and sent directly to the end consumer. This could cut a fantastic amount of waste, lower the end price and allow the farmers to keep even more margin. Not to mention, the sense connection gained by the loss of economic friction. It would be direct trade in the purest sense, peer-to-peer.
We cannot yet pull this off with the way our current supply chains are organized... but soon we will.