As we’re learning, there are multiple uses for blockchain technology (i.e. supply chain data), and IKEA Iceland is proof of that.
IKEA and Ethereum: A Solid Match?
The furniture conglomerate’s Icelandic offices recently settled an invoice on the Ethereum blockchain, and payment was issued in virtual currency. Ethereum is often sought after for its smart contract capabilities, making it one of the top blockchain to build new coins and decentralized apps on.
Unfortunately, according to co-founder Vitalik Buterin, the network has become overstuffed in recent years, accounting for very high gas prices and slow transaction times. Other competing networks, like EOS and Tron, are starting to look pretty good by comparison, but IKEA suggests that perhaps Ethereum isn’t as old or as done for as Buterin may have thought.
The transaction was initiated by a company called Trade Shift, a blockchain firm based in the United States. Fintech enterprise Monerium served as the “middleman,” overseeing the transaction and ensuring both parties received their dues.
Trade Shift co-founder Gert Sylvest comments:
Programmable money regulated by governments will become the foundation for e-commerce payments because they enable so called ‘smart contacts.’ Smart contracts have many use cases. For example, they can be used to generate ‘smart invoices,’ which are invoices that basically settle themselves.
This would be revolutionary in that the invoices would not need to be overseen by either the sending or the receiving party. In addition, no middlemen would be required, and the steps often necessary for ensuring everything falls into place will occur on their own.
Early this year, the Icelandic government issued new laws that allowed the digitization of the country’s national currency the krona. It was the digitized version of this money that was used to finalize the transaction between the two parties.
Sveinn Valfells, co-founder and CEO of Monerium, says:
As the first company authorized to issue e-money on blockchains, we are delighted to demonstrate the benefits of blockchains for mainstream B2B transactions using a legal form of digital money. Unlike cryptocurrency, which is volatile, e-money is a proven digital alternative to cash, regulated and redeemable on demand. Using programmable e-money in smart contracts heralds a new category of payments.
The digitized krona is now allegedly ready to be used throughout the country, according to reports from Monerium. The company also says that it’s looking to expand its international territory and be utilized throughout all of Europe.
What This Does for Future Crypto Payments
Discussing the circumstances of the event, CFO of Ikea Iceland Stefan Arnason explains that the recent transaction involving the ETH network is likely to open many doors for businesses to conduct business like this in the future:
A programmable financial supply chain, where trading partners can connect information flows to money flow through smart contracts, will transform how suppliers and customers interact.