The mining industry, with its integrated value chains and conservative views, is going through an intense period of change and can no longer ignore the role of technology in its ecosystem—an ecosystem that is growing and becoming more complex day by day.
Use of technology will change the way miners operate and help companies grow by offering newer business models and delivering improved productivity, safety advancements, and cost savings. These technologies could drive economic transformation in the industry in the coming years and help the mining industry become more competitive globally.
Security is one of the biggest concerns that impacts mining in the future. Blockchain technology can help the mining industry benefit financially and avoid falling prey to security breaches.
What is blockchain technology?
Blockchain, or distributed ledger, is a record of encrypted contracts or transactions that can be accessed using digital keys. It is distributed, replicated, and synchronized across people and locations, and it can be verified by anyone—but it can be changed only when there is a consensus among the group participating in the network.
Because records are stored in the form of a block, and each block has reference to the other block, forming a chain, all the distributed blocks must be hacked simultaneously for an attack to be successful, ensuring high-level of security.
How can blockchain help the mining industry?
There are many areas where blockchain can help the mining companies, including:
1. Improved cybersecurity
According to a report published by security firm Trend Micro, 22 mining companies have reported major cyber-attacks since 2010. These attacks aimed to steal intellectual property and other proprietary information, which can be devastating for any company.
A 2016 Symantec Security report revealed that mining is the number-one industry receiving spam email, and one of three spam emails includes a virus. Blockchain, as a distributed digital ledger, reduces the impact of hacking company-wide by limiting it to only the affected block. Blockchain keeps a record of every transaction and safely encrypts that information without third-party intervention, thereby reducing exposure of data to hackers.
2. Increased transparency with smart contracts
Smart contracts implemented on a blockchain improve transparency between buyers and sellers as goods are tracked in real time from their origin, reducing the chance of fraud, ensuring tracability and transparency, and improving logistics visibility and supply chain quality.
Blockchain can end payment gaps by incorporating delivery and payment in digital contracts and integrating it with logistics partners and banks. Once proof of delivery is received from the logistics team, automatic invoicing and payment can be initiated.
3. Better visibility into supply chain
Blockchain offers more visibility into the supply chain, making procurement and delivery simpler, more accurate, and more reliable. The digital ledger integrates data from all vendors and suppliers across the network, giving a complete picture of the supply chain in real time.
Blockchain brings transparency to the extent that no piece of inventory can exist in the same place at any given point. Transaction status is updated in real time, with full traceability back to the point of origin.
Blockchain technology can radically change transactions by cutting costs to support leaner organizations and increased security. It is a game-changer that offers three major features: security, immutability, and accountability. Blockchain is slowly but surely set to radically change the mining paradigm.
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