INS ECOSYSTEM

EVERYDAY GROCERIES ON THE BLOCKCHAIN

Written by: Michael Kitchener Website: www.ins.world

...makes the journey of produce from manufacturers to consumers cheaper, quicker and less prone to human error.

Amongst discussion of AI, advanced trading platforms, energy trading and various other forms of market disruption the applications of Blockchain may seem disconnected from the more immediate needs faced by people. Ultimately, Blockchain has not entered the day-to-day lives of the average person, but INS, a project which held an ICO in early December 2017, may bring the use of Blockchain to the precipice of household activity. INS is a platform that allows consumers to purchase various groceries from manufacturers – expediting the convenience and minimizing the costs of grocery shopping.

Like all (successful) Blockchain projects INS have identified a problem with the status quo and provided a candidate solution. The problem with grocery retailers, according to the INS team, is that they hold too great of a portion of the market share and subsequently have too much control over manufacturers and consumers – allowing them more control over pricing to the detriment of consumers. The status quo also incentivises manufacturers to improve their efficiency in delivering goods to retailers as opposed to increasing the quality of their produce. In the spirit of the Blockchain ethos, INS aim to provide a decentralised marketplace for transactions directly between producers and consumers.

Within this marketplace manufacturers will list and sell produce, and, at their discretion, be able to create loyalty programs using smart contracts for recurring customers. Customers will provide feedback and enjoy lower costs. The use of Blockchain will also serve to make the supply chain more efficient.

As with all Blockchain projects (and any other business) one thing that must be assessed is the need for the service within the current market. It seems that there is indeed a need for such a service, INS cite research that states grocery retailers mark-up manufacturer prices by 30-50% causing far greater costs for consumers – unless we operate under assumptions of supreme irrationality the incentives for consumers to switch to the INS platform are clearly there. INS also state that during their time in the grocery industry they have received “hundreds” of requests from producers to sell produce directly. Of course, depending on the behaviour of consumers manufactures could jack up prices to maximise their revenue and negate the entire benefit of the platform, but given the oligarchical structure of grocery retail in most countries (think big supermarket chains), and the contrastingly large amounts of producers it seems fair to think that the far greater degree of competition will keep prices sufficiently low to justify the platform.

The economics of the INS token, which was distributed in an ICO to fund the project, are multifaceted. The token functions as a classic utility token to manufactures who must hold a minimum balance to use the platform, but it will also be used in the rewards system. Importantly, it will be available as a method of payment for orders by consumers, and, unlike fiat currencies, bitcoin, or ethereum which will also be available as payment methods, will have no card fees or transaction fees associated with it – providing clear economic incentive for token usage.

The last question that must be asked is, despite the strength of the idea behind INS, whether or not a Blockchain is required? Fortunately for INS, the whitepaper provides a strong justification for the use of Blockchain. Firstly, a Blockchain with smart contract functionality allows for sales mechanisms that require no central brokerage agent. Additionally, through Blockchain the various steps used to settle transactions in traditional e-commerce can all be avoided, and finally, the well documented supply chain applications of Blockchain will make the journey of produce from manufacturer to consumer cheaper, quicker and less prone to human error.

Ultimately, INS is a fascinating project – not in that it seeks to revolutionise the world or provide some sci-fi type AI, but in the fact that it could bring Blockchain technology one step closer to mass usage.