Cryptocurrency And Blockchain Technology - Assignment Solution

Results/Findings

In this world of blockchain, the limelight has been stolen by digitization and contractual agreement that drive most of the online transactions through implementation of Smart Contracts. Blockchain, used by many global trade professionals, has been used for creating an indelible record of every step during the overall business process. The encrypted actions performed by BlockChain include identification of transaction parties, authentication of the transaction and the time stamping of the business blocks (Banerjee, 2018). The analysis conducted above for the Smart Contracts, BlockChain and Customer Engagement has surfaced four major businesses where the application of BlockChain and SC have driven business benefits i.e. wine, education, jewelry and fishery industries. 

Before discussing each industry with respect to BlockChain, SC and Customer Engagement, the relationship and importance of cryptocurrency, BlockChain, SC and online transaction has to be identified.

Cryptocurrency and Smart Contract

To this date, the most prominent use of blockchain technology has topped out to be cryptocurrency (a peer-to-peer electronic payment system). By using Etherium and Bitcoin (cryptocurrencies), the parties engage into transaction without having to base it onto trusted third party involvement (DeVries, 2016). The cost of intermediaries typically vanishes in a transaction based on cryptocurrencies as the involved parties directly use Bitcoin or Etherium as a legitimate form of payment. The use of Bitcoin (cryptocurrency) has been rising sharply despite of huge criticism that it has been receiving (see figure 1 below). 

According to Sagami (2018), many of the big businesses are spending huge funds on blockchain initiatives like cryptocurrency that will continue to keep the blockchain spending high in future as well. The report by PwC also revealed that the advisory services related to blockchain technology is as high as $1.7 bn in 2019 (Sagami, 2018). The budget spent on blockchain technology in 2017 was also lower as compared to 2019 for almost all the leading sectors including exchange, banks, technology vendors, consultants and asset managers (see figure 2 below). The budget spent on blockchain is expected to reach almost $12 bn by 2022 according to the survey by International Data Corporation (Sagami, 2018). 

Given the performance and budget being spent on blockchain technologies and cryptocurrencies, it can be said that companies are expected to increase their investment and interest in this technology space. According to Ernst & Young (2017), for 100 fortune companies in US, it usually took upto 60 days to recover outstanding sales from the customers before advent of blockchain, digital contracts and bitcoin. The extended receivable turnover shows that the companies without application of SC used to interact with each other in contracts under which the payments were made upon receipt or at most within 30 days (Ernst & Young, 2017). This gap between the sales and payment receipts make the supply chain extended and longer for the companies whilst resulting in the blockage of cash. By using smart contracts and engaging into cryptocurrency mode of payment, a proof of delivery from the logistics can immediately trigger an invoice and trigger the payment through the digital banking system while reducing the analog gap between sellers and customers (Ernst & Young, 2017). Hence, it can be said that the use of SC and payments through cryptocurrencies can reduce receivable turnover and shorten the over supply chain while making it more efficient (due to cost cutting) and reliable. 

Winery Industry and BlockChain Integration into Supply Chain

Winery industry has recently identified the importance of blockchain integration into supply chain due to increase in adulteration, counterfeiting and excessive usage of preservatives (Biswas & Muthukkumarasamy, 2017). In order to solve these issues, the wine industry has taken blockchain as a system that can provide consumers’ option to verify the composition and ingredients of wine throughout the supply chain i.e. from grape growers to the final consumers. The blockchain based supply chain traceability system allows every transaction to be stored at every block of supply chain while providing traceability, authenticity, transparency, trade, origin and opinion (TATTOO). The TATTOO Wine platform has already been used by The House of Roosevelt (largest wine cellar in Asia) that sells wines directly from the vineyards to hotels, restaurants, cafes and customers using smart contracts that increase efficiency and is cost effective (Burgess, 2019).