When you hear ‘blockchain’ your mind automatically moves to Bitcoin and cryptocurrency. Were you to utter mining in the same breath the word almost gets a digital colour and conjures the picture of a millennial computer geek punching his laptop keys and not the miner with his yellow helmet and muddy boots. Bitcoin definitely turned the spotlight on Blockchain technology. But now the revolutionary impact of blockchain is hitting diverse areas like banking, defence, voting, real estate, social networking, energy and of course the one that interests us most – mining
What is Block chain technology?
Blockchain technology in simplistic terms is nothing but a digital ledger that is shared across a network of computers. It keeps a record of every transaction and safely encrypts that information in the form of data blocks. No single authority or person can modify the data without the knowledge of the entire network. Hence Blockchain provides security and transparency in transactions, changes made to designs and documents. These aspects of Blockchain make it useful and relevant to the mining industry. Here is how using blockchain technology can revamp the mining industry
- Authenticity in mined products
Blockchain enables the end owner to get to know every set of hands that the mineral has passed through, from the moment it is extracted, to the time it reaches his or her hands. Complete knowledge of the chain of custody will guarantee the authenticity of the mineral to the user and it is the only way that big companies can make sure that they have followed SEC guidelines and that the mineral has not been sourced from conflict-free and compliant regions. The process requires sealed bags or containers of concentrates and ore to be stamped with a unique identifying ID that will subsequently be logged on the blockchain. The ID will contain information on the quality and quantity of each parcel of ore or concentrate, that gets continually updated with timeline tracking and logging movements.
2. Faster transactions
Blockchain technology brings together every player in the value chain right from financial institutions to ship operators wares operators and the many others. This synchronicity of transactions will reduce disputes and delays considerably. Even if a dispute arises, the resolution can be quick and straightforward as all participants in the ecosystem get notified of developments instantly and simultaneously. The benefits of this can even extend to small connected industries beyond mining who are not resourceful enough to upgrade technology on their own. The efficiencies developed in the value chain will not only increase profits but also drive innovation that will further boost the industry.
With blockchain, every activity is mining is recorded and is open for everyone in the network to see this makes the process transparent . So metals companies may find it easier and less complicated to ensure compliance to the legal requirements in their country of origin as well as the country of operation. Governments are monitoring agencies will also be able to do a better job in enforcing and ensuring compliance.
4. Lesser paperwork
Trade in minerals and metals mostly involve offshore imports and exports and is laden with a cumbersome load of paperwork. There are multiple intermediaries forwarding information through emails and fax and quite often inefficiency in one point in the communication line will lead to delays and problems for the entire network. Some times Cargo is held up at port because the physical paperwork is stuck up somewhere up in the line. Blockchain technology can significantly reduce paperwork, and eliminate inefficiencies. The risk of paperwork getting damaged or destroyed or lost is removed and risk of errors greatly reduced. Transactions become a lot more safer.
Blockchain technology is still an evolving technology and efforts are on by experts from all over the world to improve in areas like scalability and confidentiality. We still have a lot to learn about the development of reliable blockchain-based systems and which of those will work for us and which of them wont. But one thing we must do is to keep our eyes and ears open for new ways in which we can get better at what we aim for – responsible mining.