Supply chain management is a complex, cumbersome process. The current supply chain paradigm is slow, unwieldy, and highly centralized, with relationships between manufacturers, suppliers, vendors, and customers facilitated by third parties at almost every step. Contracts between supply chain entities are handled by lawyers and financial institutions, adding extra costs.

Friction between supply chain entities transforms what could be simple transactions into multi-step procedures that impede efficiency. Blockchain technology, however, offers a potential solution to the issue of supply chain friction, enhancing transparency, traceability, and interoperability.

But is blockchain technology mature enough yet to decentralize supply chain architecture? We’ll proceed to examine the current state of distributed ledger technology in the global supply chain industry and investigate some of the most promising platforms that are bringing the supply chain onto the blockchain.

From Bitcoin to Business

Cryptocurrencies such as Bitcoin are one of the most visible applications of blockchain technology, but they are far from the only use case— distributed ledger tech can be used to conduct any kind of exchange. The smart contract functionality offered by blockchain networks such as Ethereum, for example, can be used to execute “trustless” contracts between entities without the need for third-party arbitrators.

Security, immutability, and transparency— The same key blockchain features that make cryptocurrencies so attractive— are the same features that make it an ideal solution to the issues that currently address the supply chain industry.

In a cryptocurrency blockchain network such as Bitcoin, network participants agree on the current state of the ledger in order to ensure transactions and balances are valid. In the case of a distributed ledger focused on supply chain management, consensus is used not only to confirm payment, but also track transport, warehousing, or delivery status.

The transparent nature of a distributed ledger also streamlines provenance. Every entity involved in the movement of an asset is able to identify where and who it came from in an immutable provenance chain. Blockchain immutability also allows supply chain entities to operate with secure confirmation that remittance between organizations has occurred, or deliveries have been fulfilled.

Smart contracts, however, are the most disruptive element of blockchain technology as far as supply chain management is concerned. A smart contract is able to trigger an event based on ledger information, such as triggering delivery of an order as soon as payment is received.

The potential applications of blockchain-based supply chain platforms are diverse. US food retail giant Walmart is already using a blockchain solution to track pork meat purchases in China, improving food safety with immutable provenance techniques. Australian vehicle manufacturer Tomcar has been using blockchain solutions in order to pay suppliers in Israel and Taiwan in order to circumvent high fiat transaction fees since 2013.

RFID tags are already used to track products throughout the supply chain ecosystem, so why not integrate them into blockchain-based smart contracts to establish an open market in which logistics partners are able to bid for delivery contracts?

Is blockchain tech able to withstand the large-scale demands of established supply chain solutions, however? What is driving the adoption of blockchain solutions?

Supply Chain Network Effects & Blockchain Adoption

By eliminating third parties and automating processes that require manual checking, blockchain based supply chain solutions can considerably lower cost to serve. Supply chains are built, however, through network effects— in order for a supply chain solution built on the blockchain to deliver value, it would need to provide a solution that would immediately be adopted by a large number of industry participants.

A recent study conducted by the Department of Marketing & Logistics at the University of North Florida provides a detailed insight into the rate at which blockchain solutions are being adopted in the supply chain industry. The study, entitled “The Supply Chain Has No Clothes: Technology Adoption of Blockchain for Supply Chain Transparency”, references Professor Michael D Williams’ unified theory of acceptance and use of technology, or UTAUT, as the primary driver of blockchain tech acceptance in supply chain.

The UTAUT model identifies a positive feedback loop between performance expectancy of a new technology and the rate at which it is implemented. The increased transparency offered by blockchain technology allows asset managers to respond and adjust supply management techniques in response to improved information accuracy, as evidenced in a 2015 study on the impact of “phablets” in the supply chain industry.

By providing asset managers with a trusted single-source of distributed information, blockchain based supply chain solutions deliver the opportunity to scale and deploy resources in a far more efficient manner.

Widespread Adoption is Already Here

There are already a number of large-scale distributed ledger based supply chain management solutions operating in the industry, with the Blockchain in Transport Alliance, or BiTA, leading the way in catalyzing widespread adoption.

BiTA boasts an impressive roster of supply chain juggernauts on its member list, such as FedEx, UPS, and JD Logistics. The alliance is currently working toward solving the issues that are impeding the adoption of blockchain technology in the industry, which include a lack of technical talent, standardization, and scalability.

North American transportation management company Hub Group has recently joined BiTA, with Chief Information Officer Vava Dimond commenting on the potential impact of blockchain technology in logistics:

“A growing number of companies are identifying compelling use cases beyond solving the traditional challenges of complex supply chains… Joining BiTA means we can help create blockchain standards as well as collaborate on industry applications that will help shape the future of our industry.”

While some logistics and supply organizations may be joining forces to assess the potential viability of blockchain solutions, several blockchain networks are already delivering operational, highly efficient ready-to-use platforms.  

From ICO To IBM, Solutions Are On The Way

VeChain is a possibly the best-known of these at present, and a top-20 token according to CoinMarketCap. It’s a blockchain network focused on supply chain provenance that offers customized NFC chips embedded in luxury leather goods; these function as a blockchain-based anti-counterfeiting tool. Vechain also delivers food and drug provenance tracking, as well as a logistics solution that optimizes information flow between supply chain entities.

TE-FOOD is another blockchain-based supply chain solution that has created a farm-to-table food traceability network, responding to increased consumer awareness regarding food provenance. The TE-FOOD solution provides consumers with an app that reads product-based QR codes, drawing origin information directly from the blockchain. The company is preparing for an ICO at present.

Blockchain tech isn’t limited in scope to asset provenance, however. Eximchain is a blockchain platform that allows supply chain entities to verify remittance and finance within the industry, eliminating manual reconciliation and third party verification. Interestingly, Eximchain provides organizations with an SDK that allows for the rapid development and deployment of end-to-end supply chain apps with minimal difficulty, solving the issue of low blockchain tech literacy within the industry.

Eximchain is another ICO candidate – and in a move described by CEO Hope Liu as being due to an “unforeseeable global regulatory environment”, they recently canceled their public sale (and instead airdropped $500k to whitelisted participants). Such a move could highlight one challenge that emerging supply chain firms will all face – the very nature of their business requires international cooperation and compliance.

The blockchain revolution in supply chain is also delivering verifiable social benefits. Provenance is a blockchain based product tracking and tracing platform that allows producers to demonstrate their social and environmental impact at every point in the chain. The Provenance solution also allows non-profits and NGOs to access data from partners, allowing organizations such as FairFood to verify living wage payment to fair trade farmers. Other startups are tackling issues as serious as child slavery in Africa.

On the global blue-chip front, IBM has partnered with international shipping giant Maersk in order to develop a real-time shipping information pipeline, bringing the $4 trillion in goods carried annually by the ocean shipping industry onto the blockchain and demonstrating that blockchain innovation is no longer limited to the realm of ICOs and smaller startups.

The Future of Supply Chain and Blockchain Technology

Blockchain tech is beginning to take hold in the financial landscape— even established financial institutions that may appear to be losing out from the blockchain revolution are trialling blockchain solutions. Adoption in these sectors is slow, however, compared to the rapid rate at which blockchain solutions are entering the supply chain industry.

The compartmentalized, modular architecture of the industry allows organizations to begin using solutions such as smart contracts in small portions of their operations, creating fertile ground for the development of innovative new methodologies.

If BiTA and other industry proponents are able to solve the issues of scalability and standardization, it’s likely that we’ll see the supply chain sector become the first fully decentralized industry surprisingly soon.

The post Supply Chains Demand Blockchains appeared first on CryptoVila.

The weekly Technical Analysis, published every Wednesday, is provided by Dmitriy Gurkovskiy, Chief Analyst at RoboForex.

Needless to say, all statements and views expressed below and any forecasts contained herein are based on the authors’ particular opinion.

This analysis may not be treated as trading advice. RoboForex and Trustnodes bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Bitcoin

Bitcoin price managed to break out the long term descending channel resistance and went into the projection channel. This breakout enabled forming an uptrend, and, by now, the price is just a bit short of $12,000, still unable to hit it.

Currently, the short term ascending channel support is being tested, and in case this attempt is successful, the price may hit the lower projection channel target at $10,000. Then, the price may fall step by step till $9,000, which is the support.

A wild downward breakout is also possible, as well as a mid-term downtrend, and if this is the case the price may well hit the lower support at $5,000.

Ethereum

Ether is trading within the same descending channel as before, but is now experiencing a pullback upwards. The price is heading towards the resistance, which lies at the important round number of $1,000.

In the short term, the local trend may have changed, as the support of the uptrend channel has been broken out, and the price has fallen into the projection channel, heading down to $815.

After this target has been tested, the price may fall further till $700. The overall trend is still descending, its target being as low as $300.

Bitcoin Cash

Bitcoin Cash went above the long term descending channel resistance, which allowed it to enter the upper projection channel and outlined a new short term ascending trend. The target of the latter may be around $1,800, which is the mid-term channel resistance.

Speaking short term, the price is breaking out the ascending channel support, with the closest target at $1,200. This is exactly the level determining the next trend phase, with many things depending on the market’s reaction to it.

With the support at $1,200 broken, the price may well hit the low at $400, but, if this is the case, it will probably happen in around a few weeks. If, on the contrary, the price bounces off $1,200 upwards, this will mean a new bullish impulse.

Litecoin

Litecoin has probably gained more momentum than many other cryptocurrencies out there. The primary descending channel resistance has been broken out, and the price has headed into the second projection channel.

The market is currently uptrending, while the support of the new projection channel is being tested. The most likely scenario is bouncing off the support and rise to the resistance at $305. Conversely, if the local support at $208 is broken out, the projection channel at $160 may be hit.

Ripple

Like many other digital coins, Ripple has entered the ascending pullback phase by breaking out the previous descending channel resistance. The main target within the current projection channel is probably its resistance at $1.54.

The current status quo shows Ripple is likely to start trading sideways, within the support and resistance of $0.85 and $1.22, respectively.

The market expects the resistance to get broken out and the uptrend to continue, while if the support is hit, the price may well fall to $0.60 and then to $0.35.

The post The Outlook Appears Bleak According to This Week’s Crypto Technical Analysis appeared first on CryptoVila.

The Israel Tax Authority (ITA) recently announced that Bitcoins and cryptocurrencies, in general, would be treated and taxed as property and not as an asset. On February 19th, the ITA through a professional circular declared, “Bitcoin is an asset and not a currency.”

The above mentioned circular read,

“For purposes of income tax….. a person whose activity as aforesaid does not reach a business is only entitled to capital gains tax and the person whose activity in the field reaches a business (trade in a distributed method of payment and Such a measure), tax will be paid for any business activity.” 

Israel is going forward with a two-pronged approach when it comes to taxing cryptocurrencies. The tax slab is going to be divided into two categories. The first one includes people who hold these virtual currencies in order to gain profits, i.e, create a capital gain and the second one includes businesses (or individuals) which ‘engage’ in Bitcoin for ‘business’ purposes.

The people in the first category will be liable to pay a capital gains tax, which currently is at 25% in Israel. The people in the second category will have to pay 17% as value added tax (VAT) in addition to the 25% as capital gains tax. Hence, a businessman engaging in cryptocurrencies to carry out business activities could potentially have to pay 42% as taxes.

Chairman of the Israeli Bitcoin Association, Manny Rosenfeld commented,

“The digital currency revolution is here to stay……. Tax Authority has made several amendments to the circular in accordance with the positions we presented.”

David Lewinson, a cryptocurrency trader from Israel commented,

“This decision by the government has both pros and cons. The pros being that this decision shows that cryptocurrencies are legitimate currencies and will instill confidence in the investors and the cons being that such a high rate will result in lower number of blockchain startups and will possibly result in locals shifting to other countries with friendlier tax laws to start their business.”

Gwen Wayne, an accountant from the US says,

“Profit from Bitcoin and other altcoins should be taxed just as profit from other trades is. How is it any different? At the end of the day, capital gains is taxable and so is cryptocurrencies.”

An interview with a couple of business owners in Tel Aviv and Jerusalem have had mixed reactions where everyone is happy about the acceptance of cryptocurrencies in Israel but unhappy with the 42% tax bracket on cryptocurrencies. Sources from within the ITA say they would like to discourage the use of cryptocurrencies but would not want to ban it considering the adoption and use cases in various industries.

The post Bitcoin considered Property in Israel – businesses accepting crypto to pay heavily appeared first on CryptoVila.

Public consultations on a new regulatory regime for crypto companies in Italy are now closed. Interested parties were invited by the Ministry of Economy and Finance to share suggestions and comments on a draft decree introducing registration and reporting requirements in the sector. The new set of rules will come into force within 3 months of adoption.

Italy Trying to Understand the Phenomenon

The ministerial decree has been designed to “explore and understand the various aspects of the virtual currency phenomenon”. The legal document, aimed at implementing Italy’s updated and “strengthened” anti-money laundering laws, was published by MEF’s Treasury Department on February 2. Interested parties had two weeks to express their opinions and suggest amendments.

In May 2017 the Italian government issued another decree requiring “service providers related to the use of virtual currency”, like exchanges, to fulfil their obligations to prevent money laundering and illicit crypto transactions. The new document introduces additional responsibilities for crypto businesses. They will have to report regularly their activities to the Finance Ministry.

The text of the proposed decree clarifies that although cryptocurrency is used as a “means of exchange for the purchase of goods and services”, it is not issued by a central bank or other public authority. The embedded disclaimer also states that cryptos are “not necessarily connected to a currency that is a legal tender”.

Exchanges and Merchants to Register and Report

The new notification regime will also be applicable to commercial companies accepting cryptocurrency payments for goods, services and utilities. The Ministry wants to conduct a “systematic survey” starting with determining the number of operators in the sector. Upon commencing activity, every company should register with the Italian Agency of Intermediaries OAM in order to operate legally in the country.

The Department of the Treasury has already completed a preliminary evaluation of the technical specifications for the register, the Ministry of Finance said in a press release. The new regulatory regime is to be launched within 3 months after the decree enters into force. Its implementation responds to the need to understand the new phenomenon and its dimensions, said Roberto Ciciani, Head of the General Directorate for Prevention of Financial Crimes.

Regulators point out that the revised Italian legal framework will comply with the latest EU Anti-Money Laundering Directive – 5MLD, which introduces stricter rules to prevent financial crimes. The previous directive was adopted in Italy on May 25 last year.

The use of bitcoin and other cryptocurrencies by individuals remains largely unregulated in Italy. However, a law requiring identification of parties in crypto transactions has been introduced in the parliament. In 2016 the Italian tax authority Agenzia delle Entrate stated that cryptocurrency purchases and sales are exempt from VAT. With some limitations, personal crypto holdings and gains from transactions do not generate taxable income.

Do you think the new requirements for Italian companies to register and report will lead to more restrictions or to legalization of the crypto sector? Tell us in the comments section below.

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