Uro: Backed by Millions of Tons of Urea Fertilizer
well its a big task to achieve, especially educating the not so literate farmers in India- M sure their children can better understand it.
Would be great if those farmers could mine the URO
It all sounds very complicated, I hope the devs know what they are doing and how they can achieve it.
So once a farmer buys Urea with his URO from a retailer or wholesaler- then those pay URO to buy it from manufacturers.
Now in Fiat world- farmer pays amount x to retailer- retailer pays x-y(his profits) to wholesaler- wholesaler pays x-y-z(his profits to the manufacturers. And thats how they all make money and run their businesses.
So how does it work with URO- 1 URO = 1 MT urea. How would the process work, where would they make their profits. and what happens to all the URO which end up with the manufacturers- they sell it back to farmers or exchanges ( sounds complicated)
May be my thought process is totally wrong. But the concept is intersting and I am doing my part to the URO revolution by buying up as much as i can.
And when it all starts- i would happily donate some URO to some needy farmers in India
The key to understanding Uro in the context of agriculture is that Uro IS Urea, just “delivered in the future” (Uro coins are divisible Urea futures contracts without tedious paperwork – with the blockchain being the means to eliminate this paperwork).
Now let Uro == “Urea delivered in the future” == “Urea Certificates (UC)” (simplified adaptation of Uro paper wallets for farmers/people who don’t want or need to know about futures or Uro as a cryptocurrency).
UCs provide farmers confidence in the sustainability of their operations by hedging away the risk that they may not be able to afford fertilizer next season if the fertilizer prices go up too much – In the longer term – farmers will learn to buy their UCs when the price is low (they cannot do this without Uro because Urea has a short shelf life and the lack of storage space) – this behaviour will force the price higher – hence forming a free market supply/demand stabilisation of Urea prices – which in term reduces the magnitude of fluctuations in the Urea price for the entire economy – even those not adopting Uro.
Wholesalers make their margin by simply selling UCs at a price higher then they paid for Uro. This is no different to before – when they brought the Urea at a lower distributors price and sold it at a higher wholesale price.
In the case where the farmer goes on an exchange and buys Uro themselves directly on the open currency exchanges (unlikely due to various difficulties – learning curve, internet, access to computers, electronic bank account access, etc) – they will have effectively saved the above margin that would have been earned by the wholesaler. But since very few farmers will end up doing this the loss in revenue to wholesalers will be minimal.
Finally wholesalers have access to Urea at lower prices when they sign yearly supply contracts with international trading companies (very common) – and this can still be achieved with Uro just as before. Uro and Urea can be both be supplied in larger quantities below the current market price to wholesalers – and they continue making their margins for providing a valuable service – inventory, accounting and customer support.
Uro: Long Term Currency Backed by Millions of Tonnes of Urea Fertilizer