Blockchain works by preserving information in blocks which are chained to each other, according to Investopedia. The system’s uniqueness stems from its sustainability since it makes an irreversible timeline of data in a decentralised nature. When a block is filled, it becomes a timestamped part of this timeline that cannot be changed through one party. Blockchain has the potential to revolutionise the way business is conducted since it includes transparency (due to its decentralised nature), organisation (since new blocks are always stored linearly and chronologically), security and traceability (once a block has been added to the end of the blockchain, it is very difficult to go back and alter its content).
Traditionally suppliers have financed their purchase of goods by providing the latter as collateral to a lender. But with stock sitting in warehouses and factories unable to be processed, such trade finance has stalled. At Supply@ME Capital we have devised a solution based on blockchain whereby we can release funds to the company and take control of their stock in a digital ledger without having to physically acquire the materials. The company can then buy back the stock at cost with a fee payable to Supply@ME Capital when the supplier is in a position to proceed with manufacturing or sales.