Smart City Infrastructure

7Blockchain Technology Dislocates Traditional Practice Through Cost Cutting in International Commodity Exchange

Arya Kumar

KIIT School of Commerce and Economics, Kalinga Institute of Industrial Technology, Deemed to be University, Bhubaneswar, Odisha, India

Abstract

A Blockchain is a ledger that exists digitally and can be easily traceable by any public or private body. The records of all the transactions are being maintained through cryptography that is distributed through computer networks worldwide. The present paper considers the soybeans trading from the Indian export market, i.e., Madhya Pradesh to Brazil FOB. The result provides that this technology brings down the cost by 3.2% and a further reduction of 38% in total cost that includes the time for transit and documentation per bushel of soybeans. Detailed analysis of risk factors through value-at-risk models suggests a reduction of 2.9% per bushel of Soybeans. This result might not be significant for any financial sector but for the agro-business; these amounts of reduction impact a large for the farmers and other stakeholders by implementing the technology of Blockchain in international commodity trading.

Keywords: Blockchain technology, commodity trading, international agro trading, soybeans

7.1 Introduction

The most distinctive trading activity is the agricultural food products because of its nature of perishability. This nature brings an earnest practice in maintaining the smooth flow of the supply chain, i.e., ...