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Blockchain: Best Technology to Track Gold And Diamonds

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Mining is a critical industry in the global economy. However, even in this industry, there are multiple functions that still remain inefficient.Some of the problems that bedevil the mining industry are corruption, critical data omission and security vulnerabilities. Blockchain technology offers a solution to these issues by providing security and transparency in the supply chain sector. No wonder then that the mining industry is slowly waking up to the possibilities of blockchain and the radical ways in may change this industry. Just one example relates to the tracking of gold and diamonds.

Using the Blockchain for Tracking Gold and Diamonds

Last week, Alrosa, the largest diamond company in the world, adopted blockchain technology. Its  aim is to improve  transparency in its production and supply chain process. This happened shortly after JP Morgan made a move to tokenize gold on the blockchain.

Metal mining is a huge industry and depends heavily on supply chains. This is because large amounts of cargo pass through various locations before reaching their final destinations. Companies use blockchain technology to prevent corruption and create a more transparent mining supply chain. Additionally, this will result in less paperwork and should accelerate both the approval and transportation process.

Encrypting Data in the Mining Process

The relevant parties use the blockchain to enter data into the inventory management records. Therefore, this process encrypts the data which makes it impossible for anyone to change or tamper with it. Since the blockchain operates on a network, it is not controlled by a single entity and therefore all parties involved have access to data files that are completely unchangeable.

There is exceptional data accuracy in using blockchain technology and that’s why precious metal industries need this technology.

Spot the Illegal Trading or Mining of Precious Commodities

In October this year, the London Bullion Market Association [LBMA], announced that they were planning to improve transparency and digitalize the industry by using blockchain technology.

Recently, LBMA asked its members, who consist of the world’s largest gold refiners, dealers and banks for opinions on how to track gold and prevent fraud. It received 26 proposals from association members. Out of the 26 submitted proposals, 20 were suggestions on using blockchain technology to improve the industry.

Gold and diamonds are the most precious commodities in the world. Therefore, their respective companies should have the most transparent inventory management system in their supply chain sector.

 

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