Post #13: Avocados to Rotterdam - Heptagon Capital – Production

Remember bitcoin? It was all the rage in late 2017, but currently languishes some 70% below its peak. This post is not about bitcoin. While its future prospects…

Post #13: Avocados to Rotterdam

Remember bitcoin? It was all the rage in late 2017, but currently languishes some 70% below its peak. This post is not about bitcoin. While its future prospects (and how to value it) remain open to debate, we believe that the technology which underpins bitcoin – blockchain – is very much here to stay. This message was reinforced by a recent event we attended with two blockchain experts from Cambridge University’s Centre for Alternative Finance. 

The academics made a crucial point: there is no current consensus on what is meant by the term ‘blockchain.’ It is often used interchangeably with expressions such as shared databases, distributed ledgers and so on. Different people take each of these terms to mean different things, creating inevitable confusion, but also opportunity. At its core, all any blockchain does is permit for synchronised record keeping without having to rely on a trusted central authority.  

It is also highly important to draw a distinction between public, open and permission-less blockchains – which rely on game theory and economic incentives to function – and private, closed and permissioned blockchains. Bitcoin trading falls into the former. Where the true excitement is at, however, is in the latter. Real-world deployments are already occurring. Several use cases can be found within different segments of financial services. Sure, there is exciting potential in this integral segment of the economy, but the following example - shared with us at the event – struck us most forcibly about the potential for blockchain. 

Consider that to ship avocados from Mombasa to Rotterdam might typically involve 30 different parties, over 100 people and more than 200 pieces of information being exchanged. This is clearly highly inefficient. Imagine then a blockchain where much of this information can be stored safely (without it being tampered) and accessed by multiple parties. IBM and Maersk have already launched ‘Tradelens,’ which does precisely this. Other ocean carriers, ports, customs authorities and so on have also joined. Now, those avocados should be arriving to your supermarket more quickly and more efficiently, tasting fresher and maybe even costing less too...   

Disclaimers

The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document. 

The document is protected by copyright. The use of any trademarks and logos displayed in the document without Heptagon Capital's prior written consent is strictly prohibited. Information in the document must not be published or redistributed without Heptagon Capital's prior written consent. 

Heptagon Capital LLP, 63 Brook Street, Mayfair, London W1K 4HS
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