Is blockchain on your to-do list? It should be
As we are in quarantine, now is a great time to learn about a technology that is actively penetrating every area of economic activity and life.
It is now long overdue that people in the mining world understand that blockchain is not only about cryptocurrencies, but indeed, a paradigm shift for the entire world economy.
And it is happening very quickly.
Tackling mining industry issues with blockchain.
Blockchain technology in the mining industry can address many ongoing, familiar issues — tracking origins of metals to assure consumers that they don’t come from war zones or as a result of child labour, eliminating theft and speculation, ascertaining contract conditions by implementing smart contracts, and optimizing logistics.
The mining industry is a multi-player, data-heavy industry, where large-scale transactions of materials and money are taking place all the time. In just one mining project, stakeholders include the mining company, the governmental agencies, local communities, transport companies, traders and, eventually consumers.
The amount of certification and need for secure transactions in our operations is probably greater than in most other industries. Thus, the mining industry is ideally suited for blockchain implementation in many areas.
How does blockchain benefit the mining industry?
As you delve into learning about blockchain, again and again you will hear that blockchain creates trust, due to the immutable nature of the records — and in mining we certainly could benefit from more trust, right?
Time and costs are saved through the elimination of unnecessary intermediaries — and don’t we all know some?
Blockchain removes bad players from the system — and don’t we, in the business of mining, know more bad players than we even care to admit?
We don’t need to be tech-experts to benefit from blockchain technology. We don’t need to use crypto tokens to use blockchain. And though it is a new technology, it is not the technology of the future any more — it is technology of the present.
What is so special about blockchain that people want to implement it?
1. Data is shared by all parties. In any process where data must be accessed by several parties, blockchain eliminates delays in data updates and makes sure that everybody is looking at the same dataset.
2. All transactions are verifiable, and data cannot be changed post-factum without all relevant participants being informed. Thus, blockchain eliminates fraud.
3. Blockchain saves costs and time, as it eliminates unnecessary intermediaries, as parties involved in transactions have no need for a third-party to certify correctness of the data submitted.
Why is blockchain interesting for both upstream & downstream entities?
Tracing of origin is not a new concept, and many mines have already been using cumbersome paper certificates and tags for tracking their production. They know how time-consuming and prone-for-meddling these processes are.
Blockchain solutions are ready to be implemented to improve just about any process in mining: data access, data transfer, transaction security, improved trust between all parties, and project management efficiency.
Blockchain is already solving the traceability issue: cobalt-processing company Umicore implements blockchain to trace the origin of its metal, so that customers can be assured that no illegal or unethically-mined material ends in their products. A small jeweler in a small UK town is proudly displaying fair-trade gold rings — the origins of gold traced using blockchain. Google is using a blockchain solution for tracking tin from a South American mine. De Beers and Alrosa diamonds are now being successfully tracked on a blockchain platform, and the added benefit is that uncertified diamonds cannot now be legally sold, which makes sale of stolen goods that much more difficult. It also provides peace-of-mind and added value to the end consumer.
I am glad to report that blockchain is already planned to be implemented by some companies before the operation even starts — Deep Green, the company aiming at mining of the metal-rich nodules in the Pacific, already is planning to implement blockchain in their work.
There’s even the futuristic idea of leaving gold underground, in its “natural vault”, so to say, and selling tokens of unmined, but well-outlined, reserves.
We can learn from other industries adopting blockchain solutions.
We don’t even need to re-invent this bicycle to ride it — we can look at other industries, understand what processes they are using and how they are similar to ours, and implement what worked for them.
In real estate, blockchain helps to track properties as they pass from owner to owner — our exploration and mining licenses are our properties — so the logical solution is to look at what real estate is doing, adjust and implement.
Many construction companies are implementing smart contracts based on blockchain. Our mines are big construction projects — let’s look at what is being done, adjust and implement.
Logistics companies are tracking containers on blockchain. Don’t we move stuff around and from mines? Again — learn, adjust, implement.
Last but not least, my favourite. Data. BIG data. Don’t we all agree that databases are great at managing data? Do we have a lot of data in mining operations? Blockchain is the database of all databases, Database with a capital D, or even maybe all capitals. To connect everything to everything, so in one network every transaction will trigger every node to certify it’s correct and thus, what truly is and truly moves will be visible to all. That is not a small change. And it is already happening.
Blockchain technology is out there, ready to go.
It is up to us, experienced miners, to educate ourselves and work with technology developers who are keen to offer their solutions to improve our business.
Here is a recent example of the speed in which blockchain systems can be implemented:
As America was engulfed in an unprecedented challenge, posed by COVID-19 pandemic, many hospitals have struggled to obtain necessary supplies in a timely manner. A blockchain platform was established in a very short time to facilitate supply and distribution of PPE (personal protective equipment) to American hospitals. The system is already in operation and dozens of companies have registered. It takes 30 minutes to enter the information to become a supplier or buyer, a day of verification — and then companies can begin transactions. In just a few weeks millions of dollars’ worth of PPE was sold and bought on this brand-new blockchain. It also helps hospitals to find local suppliers.
This is how quickly a blockchain system can be established nowadays — and how fast it grows. We all need to pay attention to such developments and see where we can implement blockchain in our business of mining.
Don’t just get ready, miners. Do it.
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