What If Algorand Standard Asset Is Adopted By MSMEs
Based on data processed by P2E LIPI, the impact of tourism decline on MSMEs engaged in micro food and beverage business reached 27%. While the impact on food and beverage small businesses was 1.77%, and medium businesses were 0.07%. The influence of COVID-19 virus on wood and rattan handicraft units, micro businesses will be 17.03%. For small businesses in the wood and rattan handicraft sector 1.77% and medium businesses 0.01%. Meanwhile, household consumption will also be corrected between 0.5% and 0.8%.
Digital developments in globalization are very influential on the economy, including the retail market. Because of the corona virus, one by one the modern retail market, large scale, micro, to small, began to experience a decline in income. Even with the convenience of shopping, in reality, in the digital age people remain reluctant and prefer to do online shopping or using media applications.
In facing the Industrial Era 4.0. MSMEs are types of businesses that have an important role in increasing the GDP (Gross Domestic Product) of a country, especially in Indonesia.
According to Wikipedia, Industry 4.0 is a
automation system production by utilizing technology and big data
The Industrial Concept 4.0 was first used publicly in the Hannover Messedi industrial exhibition city of Hannover, Germany in the Year 2011. From this event actually the idea of Industry 2.0 and Industry 3.0 has just emerged, previously only known by name Technological Revolution and Digital Revolution.
Industry 4.0 uses computers and robots as the basis, the progress that has emerged in this era especially those related to computers, namely the Internet of Things (IoT), Big Data, Cloud Computers, Artificial Intelligence (AI) and Machine Learning.
The industrial revolution has occurred since the 1750s and continues today. Starting from the steam engine that dominated the industry at that time, from the train until the turbine driving machine. And now entering to 4th industrial revolution, everything has changed dramatically.
The design principles in the Industrial Revolution 4.0 are helpfulan attempt to identify and implement scenarios in the industrial revolution 4.0 such as Interoperability, Information Transparency, Technical Assistance, and Independent Decisions.
Of the several principles contained in Industrial Revolution 4.0, then to know more about industries that have changed due to the industrial revolution 4.0 such as transportation, retail, finance, insurance, agriculture and health.
MSMEs 4.0 is have to recognize and begin to combine computerized power, artificial intelligence, robotics, and material science that can accelerate the shift to more environmentally friendly products of all types
Prepare ourself for the development of new energy technologies can create cheap, abundant, and sustainable resources. The scale and breadth of technological innovation are revolutionizing the way MSME 4.0 in business.
MSME 4.0 have to explore how the Industrial 4.0 revolution could affect individuals and society. However, MSME 4.0 can take the first steps in order to create major changes to the business.
Blockchain
Essentially, a Blockchainis a series of records, very much like a general ledger or big database. Blockchain is a system that records transactions on multiple computers or networks, each computer or network containing identical records. The transaction logs are decentralized so that it is almost impossible to hack or modify unilaterally, without collecting the contribution amount from all these databases or computers.
The records of these transactions are contained in interconnected blocks. If one block is full, the next block will be connected to the previous block. Transaction records that are contained in a block that has been created, cannot be changed anymore - so blockchain is often said to be immutabledger or big database. But its uniqueness comes from the mechanism it uses to validate and protect those records.
Tokenization
Tokenization or tokenize is a representation of an asset (something that has value) in the real world to become an asset in the digital world .Tokenization means the process by which various forms of assets are converted into tokens that can be easily transferred, stored and recorded on the blockchain. Tokenization is the term for converting a value of an object (e.g. a painting, or carbon credit) into a token that can be transferred and manipulated in the blockchain system.
How does tokenization work?
This world has many types of assets that are difficult to divide / break up, transfer, where the buyer and seller generally make transactions by relying on paper and wet ink that represent these assets, but transactions with paper involve a lot of legal agreements. which makes it difficult to make transfers and often difficult to track. The tokenization process makes it easier by converting all these processes into sequences of transactions on the blockchain browser. Blockchain characters that are immutable, high fees for hacking, trusted data, and transparency are suitable for making transactions of high value.
Algorand Standard Asset
Detailed documentation about this feature is available on Algorand’s developer Website
Because of the convenience of Algorand Standard Asset ( ASA ), it allows someone who doesn't have coding experience to perform the tokenize or digitize. This's simple Tutorial
Can ASA Be Applied Or Adops By MSMEs?
So far, in my view the Micro Small and Medium Enterprises (SMEs) has a problems
in :
- Raw of material shortages - due to expensive shipping costs, and uncertain
amount of inventory - Bad Marketing - Its difficult to sell a product or service because conventionally marketing
- Bad Accounting System - Financial reports, sales data and others are irregular
- Low of Capital - Difficulty in obtaining additional capital through banks or other lenders
The problems above arise due to a lack of financial and digital literacy which has a bad impact on the MSME business itself. To increase the scale of the MSME business, new innovations are needed.
With Algorand Standard Aset ( ASA ), an MSMEs owner can make a smart contract as a
loyalty points. For example, the owner of MSMEs A, Creat " UA Token " as a loyalty points. As a reward for being loyal customer of MSMEs A, the owner of MSMEs A give UA Token that can be exchanged for free shipping or with a product/serivice of MSMEs A.
For investors, through With Algorand Standard Aset ( ASA ) they can see the number of customers of MSMEs A by looking to UA Token Holders or can see how the MSMEs A product sales are by looking how much Circulating Supply of UA Token. So that investors who are interested in investing in MSMEs A do not have to try to guess through data from third parties.
Concretely, the owners of MSMEs A can grow up their business through
loyalty points and can get investors because have real-data of their loyal
customers and their product sales information.
That's just a brief example of uses Algorand Standard Asset, there are still many problems or use cases that can be used as a basis for the tokenize your business.
As additional information, if you have a business / project idea that can be tokenize using Algorand Standard Asset, you can subscribe to the Algorand Grants Program. Algorand Foundation allocated 250 million Algo or around 1 trillion rupiah which will be given to selected projects/idea.
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