Blockchain-based freight transactions

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It seems as though all new platforms these days feature two common denominators - create transparency and streamline processes. Many of them are now being developed with blockchain.

Futurism.com defines blockchain as a platform where “transactions are verified by distribution nodes, and anyone can join or leave the network as they please.” The main element that is attracting some freight brokers is how easy it is to opt in or opt out of transactions.

Futurism.com noted that Bitcoin was one of the earliest examples of blockchain, but the platform known as Ethereum is gaining prominence in online transactions. Currency called “Ether Tokens” are used to get into contracts “without any possibility of downtime, censorship, fraud, or third-party interference.”

Bitcoin is often used for comparative purposes, but Ethereum is seen as providing a safer option. The level of confidence Ethereum provides is leading some e-commerce providers to consider offering it as a currency option.

To make this work, coding of transactions must be done within the blockchain by connecting business systems. Futurism.com used a stock exchange analogy in presenting how Ethereum is similar to buying stocks or making an investment without using an advisor.

One of the companies adopting the blockchain-based approach is 300cubits, Maritime Executive reported. 300cubits co-founder Jonathan Lee relayed in an interview how Ethereum worked for them, stating the problems associated with the container shipping industry.

For an industry with an estimated worth of $150 billion, Lee mentioned how “Industry people complain about the lack of trust between liners and customers.” So 300cubits went the route of Ethereum. The company is slated to issue a token currency called the TEU. This means, under the Ethereum platform, tokens will take the place of dollars for transactions to be settled.

Based on Lee’s explanation though, the value of tokens will increase or appreciate based on usage. This despite the TEU tokens being distributed for free. Lee added, “Their recognition and day-to-day use of TEU tokens will further enhance the value of the tokens.” And since Lee’s industry is in container shipping, the TEU token’s value will be associated with the value of “actual freight rates.”

It implies that the token’s value will increase based on supply and supply.

This brings to mind the early days of Ethereum in an effort to replace the venture capital platform. When the Ether crowdsale was launched in 2014, it generated funds amounting to $18 million. The fund was used to develop the blockchain platform that Ethereum has put up online. As much as the blockchain platform has proved to be an efficient way to raise funds for start-ups, there are still laws to be followed to prove that cryptocurrency is not a get-rich-quick scheme.

The concept of token values rising with constant usage and rising demand was the main motivator for the new breed of investors to start snapping up token-based currencies like what Ethereum had to offer. That was what Stefano Bernardi said in this article for Token Economy.

The main difference, though, is how tokens are expected to appreciate. Investors that purchased tokens from Ethereum expect this currency to appreciate similar to how investors in foreign exchanges buy currency based on speculation they will increase in value in the weeks ahead. Lee foresees the TEU tokens to appreciate due to incentives that come with using them.

Lee further sees the TEU tokens to become the preferred cryptocurrency in container shipping as this “could move the whole industry’s transactions or even the entire logistics industry’s transactions onto the blockchain.”