Overstock’s Medici Ventures Invests $2.5 Million In GrainChain Grain Storage Company’s Shares
Around the whole world, all kinds of companies are starting to use the blockchain technology. We had an amazing bull run last year and this made the blockchain technology famous. The most obvious result may have been the crash and the bear market that followed the hype, but despite the situation in the market, many companies are starting to see how they can use the blockchain away from the financial system.
Now, Overstock, which is a subsidiary of Medici Ventures, is investing a lot in a software company that is developing a solution to put the store grain transaction on the blockchain.
An announcement was made today, November 4, that Overstock would purchase an equity stake in GrainChain for the value of $2.5 million USD. The money paid for a 10% ownership of the company. Overstock also has the option to pay another $2.5 million USD to buy another 10% of the company later.
GrainStock has almost six years and its main goal is the creation of software tools that can help farmers all around the world and people who purchase grains.
GrainChain And The Blockchain
When GrainChain was created, the main reason for the existence of the company was the development of farming solutions and this included mostly Internet of Things-focused solutions. However, as time passed, the CEO of the company, Luis Macias, started to pay attention in the blockchain technology.
About two years ago, GrainChain started to experiment to start using the blockchain technology. First, the company was having trouble because it had to coordinate thousands of trucks on a daily basis and everything was being handled manually, so the solution was to use the blockchain to automate some of the processes and make it simpler.
However, the main solution is still being developed and the company now has the goal of making grain tracking easier and for connecting the buyer to a large set of buyers. The CEO has explained that the new product will be very important for the industry because it will give a more accurate vision of what is coming and going and how people are being paid.
This, he believes, could not only eliminate some middlemen in the industry but could also revolutionize how everything is done and increase efficiency.
At the moment, there are around 500 farmers using the pilot network and a waiting list of another 3,000 farmers that want to use it and will start to do it in the next year. The platform will be live for all in the first quarter of 2019 if everything moves according to the plan.
Like many companies that started blockchain enterprises last year or before, GrainChain has its own token, which will be called GrainPay. The token will be used as a way to facilitate payments and it will only be used internally to create contracts between farmers and buyers.
The CEO used an example to explain how it would work: if you had contracts involving companies in, for instance, Argentina, you would make the contract many months before the execution of the trade. However, months later, you receive in GrainPay tokens instead and convert them the currency that you wished at the date that the contract was originally created.
The main idea is to use a token that could stabilize currency fluctuations and ensure that neither side would end up losing money. However, for this to work, the value of the token would also have to be stable.
If everything would work as intended, though, it could be a good solution to be used for a cross-border payment that could appeal to a lot of farmers because it would be quick and easy.