300cubits, the Hong Kong-based blockchain startup considered to be one of the earliest proponents of blockchain within the logistics sector, has announced that it will suspend the operation of its Booking Deposit Module (BDM) beginning October 1, 2019.
Launched in July 2018 after a series of pilot shipments, the company is best known for coming out with its Ethereum-powered cryptocurrency called the “TEU tokens.”
The TEU tokens did generate considerable interest within the maritime space as major container lines like CMA CGM, MSC, COSCO and Sealand of Maersk Group participated in pushing maritime logistics processes through the decentralized ledger technology. 300cubits estimates that about 100 shippers have registered on 300cubits for their share of the TEU tokens and over a dozen of the shippers ended up utilizing the platform for moving their shipments.
However, the traction that 300cubits has received since its inception has not been flattering.
“The transaction volume through the system has been far from commercial. Only a couple hundred containers have gone through the system, which, although may seem plenty among the shipping blockchain projects, is not sufficient to keep the system going commercially,” said 300cubits in its statement.
Though 300cubits’ capitulation might send shockwaves within the logistics blockchain segment, this was a disaster in the making.
It is common knowledge that blockchain’s relevance within the logistics market lies in eradicating traditional issues that the industry contends with – like the lack of transparency and visibility into freight processes. But tokens like TEU had little bearing on how these issues were going to be solved. Stakeholders soon understood that cryptocurrency tokens did not have much inherent or perceived value to begin with, as volatility within the cryptocurrency market swayed its value unpredictably.
“The lack of liquidity for the TEU tokens and the volatility of all cryptocurrencies in general also cast a constant doubt among the users on whether the value of the tokens could be realized,” said 300cubits.
300cubits, which set out to solve the problem of rolled cargo and no-show cargo, found itself in a spot as the lack of clarity in government regulations surrounding digital currencies overwhelmed the startup’s marketing efforts. A complicated technology and its associated regulatory scares kept potential shippers at bay, hampering 300cubits’ chances of scaling up its network.
Possibly the final nail in the coffin was the last-minute letdown of a potential partnership with INTTRA, the world’s largest maritime stakeholders association, due to regulatory concerns. Once 300cubits system is suspended, the company plans to burn at least 75% of the unsold TEU tokens and will continue to burn off tokens as and when they circulate back into its fold.
Another apparent cause for the lack of traction on the platform was the lack of interest shown by maritime stakeholders towards primary blockchain differentiators like immutability and anonymity. That apart, the lack of interoperability between blockchain systems and central server-based systems was a significant stumbling block, as seamless connectivity between such disparate systems would be essential for the smooth functioning of maritime logistics processes.
This brings the need for data standardization within the blockchain space into the spotlight. Building blockchain-based platforms over a standard data framework would create fluidity in the interactions between different networks, which will eventually help increase adoption levels.
The Blockchain in Transport Alliance (BiTA) is doing just that, having published its inaugural set of royalty-free blockchain data standards that can be leveraged by any company looking to create a blockchain platform within the logistics space. BiTA is the largest consortium of its type in the world, with nearly 500 members spread across 25 countries and collectively generating over $1 trillion in annual revenue.