Blockchain has the potential to substantially change a wide range of industries. Frank Holmes, CEO of U.S. Global Investors says the mining industry is now on that list. According to a Forbes article written by Holmes,
“Blockchain technology has the potential to revolutionize how gold and precious metals are manufactured and delivered. Consider the journey a gold nugget must take along its supply chain, from mine to end consumer—it cuts through several other industries and practices, including legal, regulatory, financial, manufacturing and retail, each of which might have its own ledger system”
Holmes also explained how traditional methods are susceptible to hacking, fraud, errors and misinterpretations. There are numerous cases of billion dollar scams regarding the source of the metal or mineral sold.
“With blockchain technology, there’s no hiding anything. Decentralization guarantees complete transparency, meaning anyone along the supply chain can see how, when and where the metal was produced, and who was involved every step of the way. This will give the industry a huge shot of trust, not to mention dramatically increase efficiency.”
According to producers, tech firms and entire jurisdictions have already adopted, or will adopt, blockchain technology for its incredible range of opportunities. For example, IAMGOLD, a Toronto-based producer, announced last month that it partnered with Tradewind Markets, a fintech firm that uses blockchain technology to facilitate digital gold trading. Also, IBM just helped launch a diamond and jewelry blockchain consortium called TrustChain, with the objective of tracking and authenticating diamonds, metals and jewelry from all over the world.
With precious metals being used more widely in industrial applications, from smartphones to electric cars to Internet of Things (IoT) appliances, tracking metals across the supply chain has become increasingly more important to businesses and consumers. According to the Semiconductor Industry Association (SIA), global sales of semiconductors—which contain various metals, including gold, crossed over $400 billion for the first time in 2017. Total sales were $412.2 billion, an increase of nearly 22 percent from the previous year.
This technology offers great solutions to great problems, and maybe in the next year we could see a Blockchain-based mining industry.
by Samuel Larreal
