The World’s First Coffee Blockchain Auction

Coffee blockchain auction, hosted in partnership with Yave and Guatemalan Coffees.

During our upcoming trip to the 2019 Producer & Roaster Forum in Guatemala, we’ll have the chance to participate in the world’s first coffee blockchain auction, hosted in partnership with Yave and Guatemalan Coffees.

If you’re scratching your head reading this, don’t worry – we’re newcomers to the whole blockchain thing, too.

We looked up the definition but it still left us feeling a bit befuddled: “A system in which a record of transactions made in bitcoin or another cryptocurrency are maintained across several computers that are linked in a peer-to-peer network.”

So, here’s a real-world analogy to better understand blockchain:

Imagine you gave your favorite pen to someone to borrow. It has your initials on it and everything. Then they forgot to return it and gave it to someone else who left it somewhere and someone else picked it up. Six months later, you call up your friend, “Hey, where’s my pen?” and they’re like, “What pen? I’m pretty sure I gave it back to you” and you’re like “No, I definitely don’t have it” and they’re like “Well, I don’t have it so…” Then you end up in a huge fight and never talk again.

With blockchain, the pen would still change hands in the same way, EXCEPT every time the pen changes hands, exactly who gave it to whom and when is automatically recorded in a public database that is humanly impossible to hack. Now, when you call up your friend six months later about the pen and they’re like “Hey, I don’t have it” you can both just check the database and see exactly who has the pen.

Investor Marc Andreessen explains it like this: “For the first time, one Internet user can transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate.”

So…how does this all relate to coffee?

A bag of coffee bean is like your favorite pen. It is transferred (in exchange for money) from one party to another: from the farmer to the buyer to the importer to the roaster to the customer.  Imagine no one in that supply chain knowing who anyone else was in the chain or how much they paid to get the coffee. That’s more or less the reality with most of the coffee we drink today. By instantly recording the “who, what, when and how much” of each transaction in a database that everyone can see and no one can fudge, it prevents anyone in the process from hiding shady practices. A buyer can’t pay a farmer pittants and then lie to the importer saying they’d paid top dollar. A roaster can’t package up lower grade beans and tell the customer it’s a rare microlot lot.

Blockchain has the potential to bring a greater level of transparency and fairness to the coffee supply chain.

As The Wall Street Journal explains it, “Coffee production, with far-flung suppliers around the world and complicated supply chains involving wholesale markets and regional distributors, is an ideal commodity for a system meant to make transparency more robust.”

As a roaster, blockchain could enable us to have more data about the green beans we’re purchasing, develop stronger connections with producers in our supply chain, and continue to grow our business in the most equitable way possible. The Yave blockchain auction in Guatemala will be an incredible opportunity for us to learn more about this technology and its potential to change the coffee industry.

Yave and Guatemalan Coffees will host an online blockchain auction for 20 lots of honey, washed, and natural processed coffees. According to the event website, here’s how it will work: “All Guatemalan producers will be invited to participate and submit a lot free of charge, and the final lots will be narrowed down after multiple rounds of cupping with both national and international judges. The best 20 coffees will be selected to go up to the platform, with an opening price of $4.25 per pound.”

We are looking forward to participating in the auction and can’t wait to share everything we learn when we return to Charleston. Make sure you’re following us on Instagram @springbok_coffee_roasters to get updates during the trip!


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