I was chatting to a younger, hipper friend of mine the other day, who also happens to work in social media. We were discussing bananas, and how certain varieties are threatened by climate change and a fungal disease. ‘Oh,’ she said, ‘Then you will have heard of Banana Coin.’ ‘No,’ I replied. ‘What on earth is that?’ ‘The newest form of crypto currency,’ she answered. ‘But it’s not just about making money, it’s also designed to help save bananas and grow more of them.’
Turns out she knew what she was talking about. Banana Coin is a real thing. It’s been described as a combination of crypto currency and crowd funding. Banana Coin was set up by a team that includes Russian entrepreneurs and philanthropists, and a Thai agronomist, who are all experienced at growing bananas and have been doing so in Laos for the past three years, together with software development experts and legal experts. The Banana Coin’s White Paper (available as a pdf at https://bananacoin.io/files/White_Paper_Bananacoin_en.pdf) states that ‘the Banana Coin Project was established … in order to take advantage of block chain technology in addressing real business objectives.’
Crypto currency, for those of you not familiar with the term, is, according to Dictionary.com (which had a good concise explanation): ‘a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.’ A blockchain is a list of records (which increase everytime crytocurrency is bought or sold) called blocks, which are linked together and use cryptograhpic security measures to maintain the anonymity of buyers and sellers. All the transactions occur outside regulatory agencies, such as banks or government agencies, through the security of the block chain.
Phew. Confused? I still am a bit. Anyway, the blockchain is a highly secure method of anonymously transferring, accuring and storing cryptocurrency. Most people have heard of BitCoin, however, there are now many types of cryptocurrencies. So back to Banana Coin.
Banana Coin will, according to the White Paper, ‘create tokens using blockchain and [the crytocurrency called] Ethereum. Tokens will be emitted based on the export price of 1 kilogram of bananas.’ What this means is that each Bananacoin is a type of future speculation and/or investment in banana production: each coin represents ‘just over two pounds of bananas that will be grown on an ever-expanding plantation in Laos.’
The Bananacoin team currently farm about 100 hectares of land in Laos, and are hoping to raise enough money to increase their land size to 360 hectares within two years.
Bananas are one of Laos’ main export crops. Export income from bananas tripled from 2010 to 2016, with China becoming the biggest customer. In 2011-2012, China accounted for 42% of banana imports from Laos, and this figure grew to 88% in 2014-2015. The Chinese demand for bananas is expected to keep increasing.
The Banancoin project grows the Lady Finger banana variety, which is valuable for three reasons: first, this is the world’s most profitable type of banana; second, Chinese demand for this banana is already strong and always increasing; thirdly, the Cavendish varietal of banana (the one popular in Western countries), which currently constitutes almost all the current type of banana exported and sold in the West, is under threat of extinction from a fungus called Panama Disease. This blight wiped out a previous varietal known as Gros Michel, or Big Mike, that was replaced by the Cavendish variety, which was thought to be resistant to Panama Disease. (It’s not.)
The Bananacoin team hopes to ‘achieve a core modifiction of the global banana production industry, similar to how Uber has revolutionzed the taxi industry or Upwork has brought freelancing to a new level.’ Backers ‘invest in expansion of production and become holders of Bananacoin tokens (BCO), which can be exchanged after product launch for goods or funds and are expected to more than double in value in 18 months time.’
The goal of the project, in addition to expanding land under banana production, is to achieve ‘over 360% growth in product sales on the Chinese market.’
Once the project has been realised, Bananacoin holders can exchange their tokens either for Lady Finger bananas, or ‘equivalent monetary compensation.’ Because the demand for bananas is constant, and rising, and ‘because the token is backed by the market value of 1 kilogram of bananas, participants can be certain of the success of the project,’ according to the White Paper.
In addition, the fact that the Bananacoin crop is grown organically is sure to appeal strongly to a Chinese market that is keen for food security and a guarantee of ‘farm to store’ transparency, after the food adulteration and contamination issues that have rocked China. Modern, affluent, middle class Chinese are known to pay a premium for food that can be proven to be organic or bio-dynamic.
In the longer term, the Bananacoin team is planning to apply to an Asian agricultural fund and increase their production area to 1,000 hectares.
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