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bext360: Smart kiosks to collect coffee + data in the Democratic Republic of Congo

Local smart kiosks powered by a distributed ledger (i.e. “blockchain” technology) to collect real-time data on yield, and payout to farmers.

Photo of Vanessa Gennarelli
19 16

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EXPLAIN YOUR IDEA

Though 100 million people's livelihoods depend on coffee farming, few farmers and coops have access to data about quality of their yield, the scale of demand, or the ultimate sale prices for their product in the global marketplace. Stellar.org and bext360 will partner to use distributed ledger technology (one example is “the blockchain”) to capture and record yield data directly from farmers and coops to bolster efficiency and decrease waste. The Stellar network, a distributed, decentralized protocol for real-time transactions, will record timestamps, value or amounts, making it possible to accurately process payments and credits. All parties involved in the transaction—companies, farmers and coops—can access the data transparently. bext360 develops a network of kiosk machines for deployment in the Democratic Republic of Congo. Similar to a Coinstar but for coffee, the machine divides beans into grades of value. After the machine has evaluated their beans, farmers access the mobile app to view amounts of each grade and accept offers for payment. The application immediately offers the farmers “credits” for their beans on the network. Farmers can then cash out their credits via TMB bank, or transact in coffee credits in the local community. The prototype of the kiosk is complete. bext360 will deploy these machines in the field with a pilot network of local female entrepreneurs, who will lease and administer the machines, during the winter of 2016.

WHO BENEFITS?

Each machine serves around 4,000 small-scale farmers in a 500 square kilometer area, and will have a total impact on around 40,000 individuals including farmers, support services and their families. The machines are strategically placed so that farmers need only travel a maximum of 10 kilometers for service at a collection kiosk. Other key analytics may include tax payments, community investment and improvement to quality overtime.

WHERE WILL YOUR IDEA BE IMPLEMENTED?

Yes. Democratic Republic of Congo

ARE YOU IMPLEMENTING IN AN ELIGIBLE COUNTRY?

  • Yes

EXPERTISE IN SECTOR

  • I’ve worked in a sector related to my idea for over a year

EXPERIENCE IN IMPLEMENTATION COUNTRY(IES)

  • Yes, for more than one year.

TELL US MORE ABOUT YOU!

Daniel P. Jones, CEO of bext360, is an entrepreneur with over 17 years of experience living and working in emerging and frontier markets including China, Democratic Republic of Congo (DRC) and India. Jed McCaleb, CTO of Stellar.org, is a leading thinker in cryptography and distributed systems.

IS THIS IDEA NEW FOR YOU OR YOUR ORGANIZATION?

Bext360 is in an alpha pre-launch phase and Stellar.org is in their second full calendar year of operation. Both the idea and the organizations are officially new, but build on decades of experience. For Daniel, this idea is the culmination of five years of observation in the DRC, researching supply chains as CEO/founder of Pioneer Management. In the DRC he founded RAMIKA, the first US-owned company to successfully export conflict free minerals from DRC to the US in compliance with supply chain and traceability requirements under the Dodd-Frank Act. In addition he structured the first private port facility to be constructed in the DRC. For Jed, the Stellar network represents two decades of research and innovation in distributed systems. McCaleb developed the technology that changed peer-to-peer sharing from 1:many to many:many and is widely recognized as an expert in the field of cryptography.

HOW IS YOUR IDEA UNIQUE?

There is a lot of fanfare surrounding the potential of the Internet of Things (IoT) and blockchain technologies to benefit the developing world, but very few real-world, direct applications. Bext360 brings together these cutting-edge technologies with a partner who has an established infrastructure and network, the Eastern Congo Initiative. The technology enables IoT devices (machines) to control their own digital wallets, allowing them to collect, pay and mediate financial transactions--if this idea is successful, think of all the wide applications of right-sized payments and smart devices. By bringing technology (both Blockchain and analysis) directly to the farmers they get control over their production and are able to receive a fair price for their products and also get real-time feedback on the quality of their products, allowing them to improve their processes and increase their yield in future harvests.

WHO WILL IMPLEMENT THIS IDEA?

Bext360 will continue to develop the product and nurture partnership conversations. Eastern Congo Initiative will eventually implement the machines in the rural network of the DRC.  The machines will be implemented in eastern DRC by Bext360 in partnership with ECI and local cooperatives (KACCO). Stellar.org and bext360 are implementing the blockchain/payment aspects of the technology.

HOW HAS YOUR IDEA CHANGED BECAUSE OF BENEFICIARY FEEDBACK?

Two major changes to the implementation based on feedback from ECI, the coops and the end users: 1. The machines will be placed on trailers so they can be transported to multiple locations within the coop’s management area.  Also the trailers will allow the machines to be leased to other coop’s on the north side of the equator, as the harvest on the north side of the equator is the exact complement of the harvest on the south side of the equator.  In this way the machines will have utilization almost all year-round. 2. The exact algorithm to analyze the quality of the coffee cherries.  Based on the feedback, Bext360 is adjusting the analysis algorithm to analyze the quality of the coffee cherries. Specifically we are adding the ability to measure the density of the product via image analysis and weight in the bext360 machine. Our machine will mix the goods and take several random images for analysis. The bext360 analysis algorithm will determine the quality via analysis of three primary factors, the color of the cherries, the density of the cherries and the amount of foreign material in the analyzed batch. The next step is testing the algorithm in the field in 3Q 2016.

WHAT ARE SOME OF YOUR UNANSWERED QUESTIONS ABOUT THIS IDEA?

As this is unique and new methodology for the farmers in the DRC there are many unanswered questions that need to be answered to have a successful implementation. The main questions are centered on the business model and partnership for purchasing the product directly from the farmer. Fortunately, the coops and ECI have significant relationships (and it is aligned with their mission) in the coffee business, including with Starbucks and Falcon. We are currently working on details of the amount the farmer will be paid at analysis and how much they will be paid once the product is exported from the country.

Stellar.org and bext360 will partner to use distributed ledger technology (one example is “the blockchain”) to capture and record yield data directly from farmers and coops to bolster efficiency, decrease waste and increase revenues per farmer and per cooperative.

19 comments

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Spam
Photo of Khan Saab
Team

What a fantastic post!This is so chock full of useful information.
I can't wait to dig deep and start utilizing the resources you have given me.
Thanks again for sharing https://www.creativedestructionpc.com/

Spam
Photo of Chioma Ume
Team

Hi Vanessa! Below are some feedback from the Amplify team and our experts. We look forward to reading your responses!

-How might you create trust amongst farmers in DRC who may be hesitant of a black box grading their coffee?-How would buyers afford to maintain the system to maintain the system over time?
-How will price information, which can fluctuate during the day, be updated at the kiosk?
-What if the farmer is unhappy with the grade - can they get their coffee back and sell it elsewhere?

Spam
Photo of Vanessa Gennarelli
Team

Hello @Chioma Ume :) - How might you create trust amongst farmers in DRC who may be hesitant of a black box grading their coffee?


bext360’s product distribution design secures buy-in from the community. The bext360 machines will be owned and managed by members of the community, and their visibility will build trust in the local social fabric.

- How would buyers afford to maintain the system to maintain the system over time?
All operating, maintenance and preventative costs are built in to the business logic of the system.

After collection is complete, the funds are calculated and paid out in seconds to all of the stakeholders involved. A portion of those funds will be dedicated to maintenance of the machines.

One of the primary principles of the bext360 technology is sustainability: the system and payment processes ensure that the equipment is proactively maintained and remains viable.

- How will price information, which can fluctuate during the day, be updated at the kiosk?
The distributed ledger technology (provided by Stellar) is live and pushed every 3-5 seconds. That information loads to the devices all the stakeholders use.

- What if the farmer is unhappy with the grade - can they get their coffee back and sell it elsewhere?
Farmers have the option to reject payment -- the product is instantly returned to them (see attached screenshots in documents for that UX).

Spam
Photo of Chioma Ume
Team

Hi Vanessa,
Thanks so much for the responses. I notice you haven't answered all of the questions on the contribution form. The challenge is about to close in 30 minutes, but if you could fill in the last questions, that would be great!

Spam
Photo of Vanessa Gennarelli
Team

Hi Chioma Ume I'm a bit lost with the forms--what is missing still?

Spam
Photo of Chioma Ume
Team

Hi Vanessa, it's fine, don't worry! If members of our team have questions for you, they'll ask them via the comments! 

Spam
Photo of Dr Simon M Holland
Team

Very interesting concept, to collect the farm produce as well valuable data.
In future this data will guide you for your sourcing side, I think.
May be in near future  we can look to collaborate with you.

Best
Simon

Spam
Photo of Antoine Abou Nader
Team

Hi Vanessa,

Great job! looks like a solution that can be adapted to many crops and situations.
You said that the machine will evaluate the beans, how will this work and what if the quality is mixed ?
Any approach to prevent hacking or vandalizing the machine ?

thank you :)  

Spam
Photo of Vanessa Gennarelli
Team

Hello Tony! 
The machine will sort by moisture, % of defects and size of the beans (into grades A, B and C).
Thanks for asking about security. The machine can also be "locked" so outsiders can't use it and it can also be mobile to put away overnight for safekeeping.

Hope this helps!

Spam
Photo of Daniel Jones
Team

Tony, thanks for the questions.

Quality -- The machine will determine the "total" quality of the product.  The machine can be programed to use the process and rating system for the local quality for coffee export.  It will then know the quality from the individual farmer so that data can be provided as feedback to the farmer and community to research why the yield or quality for one farm is higher and/or better than another.

Security -- One of the main goals of bext360 is to provide the machine to an individual that will own the machine.  So the entrepreneur (in most cases a female person in the local community) will be responsible for the machine and will essentially become a small business owner.  Our technology (with stellar.org) allows for the machine to make payments not only to the farmer ("Seller" of the goods) but to the owner of the machine ("Collector").  The technology also allows the machine to repay the bank on the loan based on usage (or time), automatically as the machine is operating.  Lastly, the machine will make payments to the Coop ("Cooperative") for a school or other program that the community agrees on.

One final thought is that our technology is designed to be added to other assets in the supply chain as well and enable banks to lend to the local communities, increasing the amount and value of all of the goods.  For example our technology can be added to other segments in the vertical supply chain for coffee after collection (washing, roasting) or before collection (farm equipment, irrigation systems, and some of the other great ideas that have been submitted into OPENIDEO).  Our technology can help bring capital resources to the general supply chain.  

Hope this helps.

Dan
dan@bext360.com

Spam
Photo of Juan Pablo Ospina Yepes
Team

I like your idea, good look

Spam
Photo of Eva Gantz
Team

Hello Leah,

Thanks for the thoughtful questions and the kind words! Let me try to answer them one at a time:

"Who are the farmers that your organization has delegated to retrieving the beans from the kiosks?"
I'm actually not 100% sure about this, so I've reached out to Daniel of bext360 to find out. Will post when I know more. Thanks for this question!

"One of the things I was thinking about was the possibility of theft. Are the owners of the machines farmers?"

A network of local female entrepreneurs will lease and administer the machines. When an entrepreneur leases the machine, they pay the lease fee directly out of each small transaction. They're still turning a profit, creating more job opportunities for rural women, and the machine owners and manufacturers know that they'll get their lease payment. Having the payments automated makes it easier for all parties.

"Do the machines keep a record of everything deposited in them so that owners can stay accountable?"
Yes. In fact, every transaction is recorded on the Stellar network, where it will permanently stay. Transactons on the network are visible for absolutely anyone, so all parties have access to the same data - the farmers, the entrepreneurs who lease the machines, and the machine owners all have the same data. There's no way to "cheat" the system or fudge the books, because the network validates every transaction using a cutting-edge "consensus algorithm." And all transactions are validated in 3-5 seconds.

Hope this helps clarify a bit, and please feel free to ask follow up questions if it didn't!

Spam
Photo of Leah
Team

Hi Vanessa, 

This seems like a very unique and actually fun way of being able to work with farmers to ensure they receive fair and real time wages for their coffee beans. First, I would like to ask, how large are these kiosk stations? How much coffee beans will they be able to measure and how much will this system be able to store until someone comes and retrieves the purchased coffee beans? Since this is going to be in the Congo, will the kiosk's be placed in well populated areas with plenty of electricity or are there options for more rural development if the kiosks are run perhaps on solar energy? I noticed in the write up you had mentioned that farmers will be offered a credit from the bank that they can access from their smart phones. Does this mean your company is looking to target more developed farmers or will you provide every farmer who uses your service with a smart phone device? Hope these questions help and are not overwhelming. Let me know what you think.

Spam
Photo of Vanessa Gennarelli
Team

Hi Leah, hope this answers your questions.

# 1. Size.
~1m x1m x1.5 meters tall at the load height and up to 3 meters with solar panels positioned above the station. The collection amount can range from 10kg to 60kg, with storage up to 600kg. Depending on the commodity and selling relationship, the bext360 collection machines can be stationary or mobile. Additionally the machines can be “locked” or the owner of the machine can empty so that it can collect additional product.

# 2. Power.
Machines can be solar, plugged-in or connected to vehicle power sources (for mobile bext360 collection machines). Basic power consists of 4 - 6 Volt battery's to store the energy. The system will require 24 Volts DC current and draw an estimated 4-6 Peak Amps when operating and close to 0 amps when idle.

# 3. Phones/access.
There are 3 operating models. First, all farmers use (are given) Android devices to find and transact with the machine. Second, the Collector (owner and new entrepreneur) uses her/his device to interact with the machine and transfers currency to farmers account or gives farmer cash. Three, farmer interact with Android device directly attached to machine. bext360 plans to use Stellar to issue a local currency for the Coop/group that the farmer is part of. The farmer will be paid in the local Coop currency, we will offer with our banking partners the ability for the farmer to “sweep” currency in local currency in their own bank account. For example if the farmer has rules set that they will not have more than 80 unites of the local currency then the additional currency will be swept into the local currency in the the farmers bank account.

Thanks Leah, Vanessa

Spam
Photo of Leah
Team

Vanessa,

Who are the farmers that your organization has delegated to retrieving the beans from the kiosks? One of the things I was thinking about was the possibility of theft.  Are the owners of the machines farmers? Do the machines keep a record of everything deposited in them so that owners can stay accountable? I think this is a really innovative idea that has the potential to really impact many lives and help lift people out of poverty. Well done. 

Spam
Photo of Brian Powell
Team

Hi Vanessa,

Great solution!  I don't know anything about coffee production, but I am fascinated with Stellar.org's concept.  I just signed up for an account with them.  Thanks for pointing me in their direction.

All the best,
Brian

Spam
Photo of Vanessa Gennarelli
Team

Brian Powell hi fives!! :)

Spam
Photo of Shane Zhao
Team

Exciting to see you've already prototyped this idea Vanessa! We're curious to learn a bit more about how farmers are able to select the purchase price for their coffee beans at the kiosk machines. Would bext360 have a set market price for the collection of beans relative to the location? Also, how will the kiosk machines be maintained and serviced on the ground?

Spam
Photo of Vanessa Gennarelli
Team

Hi Shane,

Market price: bext360 will partner with wholesale buyers such that a business process can be establish to determine quality and let the farmer determine to whom to sell the product. The ultimate buyers (Starbucks) or wholesalers (Falcon) will determine the fair-trade price. bext360 contains all of the business logic at the time of sale to determine the distribution of payments to all the stakeholders: I) Farmer II) Machine-owner – Collector III) Bank IV) Coop –for school, hospital etc. When the goods are exported the system (bext360 and Stellar) can pay additional amounts based upon the business logic and the final quality of the product exported. It is envisioned that the bext360 technology will be added to other assets in the supply chain that add value to the product. For example a washing station or roasting. We believe this will lead to a methodology that will allow for increased yield, payment and allow for creation of more jobs closer to the point of origin of the coffee.


Maintenance: bext360 will be partnering to maintain the machines. The machine is designed so that the analysis “top” of the machine can be switched out and then repaired as needed, while allowing the machine to have the greatest availability. One of the exciting elements of the partnership between Stellar and bext360 is that the payments are made by the machine and these payments can include payments for maintenance of the machine and transportation of the goods. All this will be done transparently. One of the greatest limitations of international aide is that often issues of maintenance and working capital for long-term operations are not included into the budget. bext360 seeks to build for-profit operations for the collector and all of the stakeholders in the operation which will allow for ongoing operations and growth of the value of the goods that are harvested.

Hope this answers your queries, Vanessa