The global economy has its foundation in the mining and metals industry. However, this sector still works in inefficient and old-fashioned ways, which opens the door to omitting critical data, being exposed to various vulnerabilities such as security, and more. Enter blockchain technology.
What is Blockchain Technology?
Blockchain is a system of recording information in a way that makes it difficult or near-to-impossible to change, hack, or cheat the system. Essentially, it's a distributed ledger technology (or DLT) that is duplicated and spread across the entire network of computer systems on the blockchain. Each block in the chain contains several transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant's ledger. For instance, Bitcoin and Ethereum are famous examples of blockchain technology. They constantly and continually grow because of blocks being added to their chain – significantly adding to the ledger's security.
Blockchain Technology in Mining
Blockchain technology can fundamentally alter the way the mining industry and its various supply chains operate. Not only does it have an immutable and cryptographically secure archive of records stored on a distributed ledger, but it can also facilitate more secure exchange of critical documents to stakeholders. Here are three ways that it can enhance the value chain:
1. Fewer Paper Exchanges
The mining industry is a paper-heavy one. So much so that even fax is still used to this day. But when it comes to shipping, cargo is only redeemable against a paper bill of lading, and physical paperwork is often needed at ports to claim cargo. Not only could this be better solved by going more digitally, but you can also certify the grade of commodities being delivered with blockchain, such as gold.
2. Faster Transactions
The synchronization that blockchain is known for would allow users to stay up to date on trade developments. This allows for a faster consensus on additional trade terms like a shipment schedule. Also, its straightforward nature and how information is tracked would minimize possible disputes and allow for broad adoption – even beyond the mining industry.
Despite significant strides made in sustainability and compliance, the mining industry still has a way to go to remain innovative and current. For instance, ensuring the right amount of cyanide usage and not polluting any water resources is still an issue many mines have to be cautious about. However, by using blockchain technology, there could be much more transparency, complication, and accountability for the various stakeholders involved.
The future of blockchain and a digital economy is still uncertain but recognizing these technologies and implementing a digital strategy is what will set you apart from your competitors. Early adoption and experimentation will lead to pioneering frameworks, manageable business models, and more sustainable international trade flows.