A farming business located in a small village Kolionovo outside of Moscow has integrated its activities onto blockchain.
“Experts say we were the first in the world to do such thing. It took us several months to realize, conceptualize, prepare, test and create algorithms and this step itself,” founder and head of Kolionovo farm Mikhail Shlyapnikov told ForkLog.
Mikhail Shlyapnikov in the center
According to the farmer, blockchainizing the business does not violate Russian laws.
“Preempting the questions from the state prosecutor, the investigative committee, the ministry of finance and the Central Bank, we state we stay within the legal realm of Russia, retaining the taxation and liability systems for some payments. It’s just a part of organizational, financial, and legal issues transferred onto a more comfortable decentralized area of blockchain,” he noted.
The very form incorporates a two-level architecture, with the first level using the village’s own cryptocurrency dubbed Kolions.
“After a prolonged litigation and decisions as to their prohibition, we’ve transferred them into the virtual space of the crypto-area, having retained their unconditional backing with our own assets,”Shlyapnikov elaborated.
Kolions first hit the news in 2015, though back then they had a form of paper money. Shlyapnikov, who devised them, described them as money for farmers intended to act as a substitute for barter deals commonly occurring in Russian farming’s everyday practice. However, the state prosecutor’s office found it to be a threat to Russia’s economic system and the Central Bank’s policy.
Now, Shlyapnikov notes, kolions have several forms. The basic production form covers the development of production, and procurement of equipment, technologies, and tools. This kind of kolions is not volatile, which is important for agricultural production. The other kind of kolions is ‘operational’. It bears features of demurrage and maintains an increase of a business’s financial turnover, as well as attracting investment. It also has a social function of charity and backing socially important projects. There also are ‘external’ kolions pegged to fiat and cryptocurrencies.
The second level of blockchain farming is based on Emercoin platform, with the following features thereof used by the farmers:
1. Fast, safe and inexpensive settlements within distributed businesses via crypto-wallets in Emercoins.
2. Nearly free-of-charge support of the distributed ledger of the farms’ shares by means of a distributed notary on emcDPO. It is reflected in blocks across hundreds of thousands of computers all around the world.
3. At a shareholder’s discretion, there is an option of automatic payout of dividends in Emercoin network instead of a natural product.
The project’s press release highlights the following advantages of using blockchain technology:
1. Cost cutting and increase of volumes for customers and buyers of their products, as well as expansion of offered product range.
2. Additional fundraising, creation of new jobs, increase of wages, decrease of prime costs, enhancement of financial planning, increase of work efficiency, and additional money saving for pensions, and protection against bankruptcy and banking sanctions.
3. Ongoing programs on charity, security, restoration of forests, and so on. Additionally, it covers enhancement Kolionovo’s infrastructure.
4. Informational support to heads of farming businesses, consumer companies and cooperative firms that opt to use blockchain technology.
The village's inhabitants intend to “closely cover some details of yet another village fun of theirs”. ForkLog monitors the development of affairs.