Blockchain Trade Finance

Blockchain | TFG Ultimate Guide to DLT

Trade Finance Global / Blockchain Trade Finance

Blockchain, DLT and Trade Finance – Your TFG Guide

Welcome to our blockchain hub, a comprehensive guide by Trade Finance Global and TradeIX on the use of distributed ledger technologies (DLT) and blockchain within international trade, trade finance, and shipping. Consortia, networks and technologies have emerged in attempts to digitize trade, yet to date, their applications have been relatively unsuccessful and disjointed. We investigate some of the key opportunities and challenges the in the current ecosystem, as well as an in depth look at what needs to happen for the industry to evolve. Just as TCP/IP, HTML, and HTTP provide shared and open standards and protocols that enabled the Internet to become what it is, so too can blockchain and related technologies create a flatter, smarter, more connected, and overall better world for global trade and commerce.

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Infographics, Charts & Diagrams

Evolution of Technology in Trade Finance

Evolution-in-Trade-Finance20190506
3 models for the how platforms should evolve and adapt, from single instance, on-premise software to distributed platforms & networks ‘a network of platforms’

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Gartner Hype Cycle for Blockchain / DLT and trade finance adoption


Our indication of the current position of DLT for trade and shipping on the hype cycle curve, supported by past events, and, our prediction of key future events that will facilitate movement along the hype cycle curve.
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Consortia & Networks 2019 – Where we are at now

Depiction of the current state of the market. Each segment represents a network in the ecosystem. The underlying technology is shown at the core, followed by the network leads, and finally the participants. There are several more consortia and networks represented within the trade finance ecosystem; this paper highlights the major players with 8+ companies as key members or shareholders.
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Key Consortia and Network Articles

20May

Consortia & Networks 2019 – Where are we at now?

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The use of distributed ledger technology in the trade finance space is moving fast. Today’s DLT-trade ecosystem can be sectioned into... Read More →
20May

We’re Doomed: The Blockchain Gartner Hype Cycle for Trade & Shipping

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The Gartner hype cycle serves as a tool to help decision makers and investors gauge the actual current state of... Read More →
20May

The Evolution of Technology in Trade

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Why distributed platforms and networks can achieve global scale and adoption previously impossible with legacy technologies, architecture, and business models.... Read More →
20May

From days to seconds: reducing trade finance transaction times using DLT

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Consortia have become a common method for businesses to collaborate on the use of blockchain and DLT technology – which... Read More →
20May

Regulatory and Legal Challenges around the Digitization of Trade and Shipping

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The superimposition of DLT into the trade and shipping space naturally brings about a major step towards the digitization of... Read More →
20May

Who’s Who? The Consortia and Networks of trade finance revealed

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Trade Finance Global today releases a map of networks and consortia in the trade finance and shipping space. Highlighting the... Read More →
20May

ITFA, on the global state of trade finance digitisation

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Trade finance has been a very slowly moving space when it comes to embracing digital innovations. However, the coin is... Read More →
20May

INSIGHT: The underlying tech behind trade finance blockchain consortia

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At the core of every DLT based platform lies the underlying distributed ledger technology infrastructure. Each technological infrastructure offers its... Read More →
20May

What do we need to do to make blockchain trade finance work?

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To date, attempts to digitize trade and trade finance and to connect trading parties have been relatively unsuccessful. Internal processes... Read More →

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Contributions

Popular Cryptocurrencies

Bitcoin – The inaugral cryptocurrency, bitcoin has a $100bn market cap, and by far the most commonly used crypto.

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Ethereum – A public blockchain with smart contract functionality, the EVM is a simple and viable mechanism for trade finance.

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Monero – The anonymous crypto. With privacy being it’s USP, Monero is one of the most confidential cryptos in the market.

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Dash – The younger sibling of Bitcoin, Dash is an improved crypto with Masternodes, privateSend and InstandSend.

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Ripple – Comprised of XRP and RipppleNet, we see the future of payments being Ripple. It doesn’t use blockchain for concensus and cannot be mined.

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Litecoin – A near replica of Bitcoin, Litecoin has a faster processing speed and coin limit. The 6th largest by market cap, it’s one to watch.

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Get in touch with our Blockchain trade finance experts. Enquire now.

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Blockchain for Trade Finance Podcasts

Similarities DLT Challenges

Latest Blockchain News

03Jul

Facebook’s Libra, a game changing innovation or aspirational experiment?

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Facebook recently announced a “blockchain powered currency” called Libra which appears to be a potentially game changing development in payments.... Read More →
01Jul

U.S. Congress Sets Separate Hearings for Facebook’s Cryptocurrency, Libra

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The U.S. legislative body has set congressional hearings after several lawmakers raised concerns hours after social media giant, Facebook, announced... Read More →
27Jun

PODCAST LIVE: Artificial Intelligence and Trade Finance (S1E14)

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TFG were live at the Telegraph’s Future of Trade & Export conference, joined by Michael Boguslavsky, Head of AI at... Read More →
26Jun

Dr. Liam Fox opens The Telegraph’s ‘Future of Trade & Export’ conference

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The Telegraph’s ‘Future of Trade and Export’ conference sought to explore ‘new opportunities in international trade policy, finance and technology’.... Read More →
14Jun

Crypto assets as Property under English Law

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Crypto assets (including Crypto currencies) and the technologies which underpin them are important because of the potentially huge benefits to... Read More →
31May

PODCAST: Rewiring Trade Finance – TradeIX’s Dave Sutter on the Evolution of Networks and Consortia (S1E11)

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During Consortia 2019, Deepesh Patel heard from Chief Strategy Officer Dave Sutter from TradeIX, discussing the key requirements for the... Read More →
24May

INTERVIEW: Derek Lee, Lantana Tech – Breaking Limitations of BRI Cross Border Trade

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The world's largest exporter, China is set to grow with its huge Belt and Road Initiative (BRI) over the next... Read More →
16May

we.trade – A Significant Departure and The Long Road Ahead

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With the departure of we.trade's cofounder Roberto Mancone – TFG investigates the significant challenges on the road ahead for the... Read More →

An A to Z of Blockchain, Cryptocurrencies and Trade Finance

Frequently Asked Questions

What is Blockchain?

A blockchain is essentially a decentralised, distributed ledger that permanently records transactions. ‘Decentralised’ means that no single individual or group has excess control over the exchanges. ‘Distributed’ means that the ledger is sent out to many computers. In other words, it’s made public and thus is completely transparent. Whilst everyone can view the blockchain, nobody can amend it.

The term ‘blockchain’ is derived from the way the technology works. Each ‘block’ contains encoded data of groups of valid transactions. These transactions are linked to previous blocks to form a ‘chain’, hence we get the name ‘blockchain’.

It’s not necessary to understand the complexities of how the technology works to understand what it does. Blockchain technology provides a way to transact directly via a peer-to-peer network securely. This means that you can use the blockchain to transact without any middlemen.

How Does Blockchain Work?

Transactions are recorded to a blockchain through 5 important steps:

Step 1: Two parties initiate a transaction by agreeing to exchange something of value. In most cases, this will be a cryptocurrency token or other asset.

Step 2: This pending transaction joins others and creates a ‘block’ which is then sent out to ‘miners’. Miners are computers on the blockchain network that evaluate transactions to earn a reward. This reward is usually new cryptocurrency tokens or a part of the transaction fee. They validate the transaction by solving complex mathematical problems using computer power.

Step 3: If miners reach consensus to validate the transaction, it’s verified and added to the blockchain.

Step 4: A timestamp is added to this transaction block using a cryptographic receipt. As each block has a reference to the hash of the previous block, there is an unalterable chain of records.

Step 5: The transaction is complete and the unit of value is transferred to the receiving party.

Infographic: How does Blockchain work?

Source: By Shivratan rajvi [CC BY-SA 4.0  (https://creativecommons.org/licenses/by-sa/4.0)], from Wikimedia Commons

What is Blockchain Used For?

Blockchain technology was originally designed as the foundation upon which cryptocurrencies could be built. Since then, and it’s use cases have expanded hugely as the technology has evolved. The invention of Ethereum’s Smart Contracts made it easier for developers to build applications for many different industries, including:

  • Cybersecurity
  • Travel
  • Banking
  • Trade finance
  • Cloud storage
  • Legal
  • Insurance
  • Healthcare

The reason that blockchain has so many use cases is that it provides a reliable, secure and transparent network. This makes it useful for any business that could benefit from a way to transfer data securely, quickly and transparently.

Are Cryptocurrencies and Blockchain the Same Thing?

Contrary to popular belief, blockchain and cryptocurrencies aren’t one in the same. Many people think that this is the case as the two terms come up in the same sentence quite often – they’re closely linked.

Cryptocurrencies are digital currencies – they’re units of value that take the form of tokens. The blockchain is the digital ledger that stores a record of all cryptocurrency transactions. Blockchain is also used in other applications outside of cryptocurrencies.

What are Cryptocurrencies Used For?

There are several use cases for cryptocurrencies, including:

Cross-border payments:

Sending fiat currencies internationally often comes with excessive fees for international transfers. It’s also a lengthy and time-consuming process to complete through regular banks. Cryptocurrencies allow you to send money across international borders directly. The exchange is completed almost instantly and with minimal fees.

Anonymous transactions:

Cryptocurrencies offer higher levels of anonymity than fiat currencies. This makes them ideal as a medium of exchange for transactions where a high level of anonymity is preferred.

As an investment vehicle:

The cryptocurrency market is hugely volatile, but it has seen massive growth over the last decade. It’s an accessible market for beginner investors who are willing to invest in high-risk, high-reward assets.

What are the Most Common Cryptocurrencies?

Bitcoin is the most popular cryptocurrency. As it was the inaugural cryptocurrency, it benefited from a first-mover advantage which has allowed it to remain the leading cryptocurrency by market capitalisation.

According to CoinMarketCap, the top 5 cryptocurrencies by market capitalisation as of July 2018 are:

  1. Bitcoin
  2. Ethereum
  3. XRP
  4. Bitcoin Cash
  5. EOS

Is it Still Worth Investing in Cryptocurrencies?

Many investors believe that the cryptocurrency market is in the midst of a speculative bubble that is destined to pop. This may be at least partially correct as there can be little doubt that cryptocurrency prices have been extremely volatile.

The last spike in price came in 2017 when prices rose exponentially. Since then, the market has been in decline. However, there may be a further price spike in the future as the technology moves forward. Many banks are beginning to adopt blockchain technology and more and more retailers are beginning to accept cryptocurrency payments. These facts bode well for the future of cryptocurrencies.

Ultimately, this is a hotly debated topic and whether it’s still worth investing is a matter of opinion. The future of the cryptocurrency market remains uncertain.

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