Scale tickets from elevators could soon be a document of the past. In the future, your grain could have all its characteristics and attributes filed digitally and accessed via a QR code as it moves through the supply chain.
Welcome to the growing trend of non-fungible tokens (NFTs). Don’t let the technical name scare you, NFTs are essentially a collection of data, says Joshua Toews, cofounder of NGF Global, which uses technology to facilitate transactions between grain sellers and buyers.
“Everybody thinks of bitcoin but really NFTs are a living ledger,” he says. “It’s a ledger of data that gets passed through the chain. Imagine sending a piece of paper with your grain and everyone who touches it is going to put their signature on it. This is just a faster way.”
NFTs will continue to play a larger role in agriculture, Toews says, as processors and end users of grain want specific characteristics. For instance, if a food company wants soybeans grown with less water and a certain oil content, the NFT will prove that was the case.
“Consumers are demanding more information about food,” he says. “So, if we have a QR code on a bag and they can see where that grain came from, the route it took to get there, where it was processed, what was used on it, etc., that adds value and people will pay extra for that. NFTs pass that value along to the farmer.”
The complexity of NFTs is also what makes them a safe option, Toews says. They are encrypted tokens stored on a digital blockchain, which increases privacy.
What is a non-fungible token? Is that Bitcoin? Why should you care? We talk about how and why NFT is already in farming and how it will probably be a part of your life sometime soon. Listen to this episode of Farming the Countryside:
DNA OF DATA
In other words, an NFT is a stack of digital records unique to a specific asset, says Steve Cubbage, founder of Longitude 94, an agriculture sustainability and technology consulting business.
“Digital is everything, and everything has a digital DNA to it,” he says. “Being able to prove with it with these digital markers is what makes it valuable.”
For most farmers, Cubbage says, only 30% to 40% of their production data is digital. The rest of the production picture is filled in by memory or paper records.
“In the world of NFTs, that doesn’t hold as much water as what you can prove,” he says. “I don’t know what tomorrow bringing, but if you don’t have your data digitized you probably won’t play the game.”
NFTs Versus Crypto
Non-fungible tokens are not the same as cryptocurrencies such as bitcoin, says Steve Cubbage of Longitude 94. They are more like cousins, as they are digital assets that can be bought and sold, and they live on blockchains. Here is how they differ.
NFTs – a digital file
- Unique and NONINTERCHANGEABLE
- Value based on its characteristics, rarity, utility and demand.
Crypto – a digital currency
- Uniform and INTERCHANGEABLE
- Value based on supply and demand, regulation and accessibility.
