Many industries often overlap and the story is no different when it comes to cybersecurity, blockchain and mining intersecting–and we’re not talking about blockchain mining. According to Softpedia, between 2010 and 2016, 22 mining companies reported major cyber attacks. Arguably cybersecurity and mining are on a collision course, but it’s getting harder to ignore that blockchain technology offers a way out.
Accenture Consulting reported that attacks range from hacking private information, hijacking intellectual property, or knocking an M&A off course. Similarly, Symantec’s Internet Security Threat Report shows that mining tops the list of industries receiving spam email, though it should be noted that there is not much difference in the numbers regarding other industries being spammed.
However when around a third of emails have a virus, it’s not a list anyone wants to top–which is one reason why the mining community is turning to blockchain. Blockchain cuts out any middlemen, which affords less time to hackers trying to steal data.
With that in mind, here’s a look at the uses for blockchain in the mining industry.
Blockchain in the mining industry: applications
A PWC report called, “We need to talk about the future of mining,” touches base on what blockchain technologies can provide the mining industry.
In the report, it states one of the biggest challenges miners will face in the future is the shift from-business-to-business mindsets to “one that gives greater consideration to the needs of the consumer and other stakeholders.”
That said, the report highlights that blockchain technology is already used in resources such as diamonds. As stated by PWC, diamonds are imprinted by a QR code linking to a digital token “verifying their quality, ethical extraction and authenticity.”
Much like blockchain applications, this process cuts down on fraud, theft and insurance costs, as well as creating a more transparent viewpoint of “the custody of goods.”
On that note, Accenture indicates that the level of security blockchain has can help improve areas such as:
- The internet of things (IoT): More connected devices means more data generated. In order to process this effectively, blockchain could be used, in the form of IBM’s (NYSE:IBM) Autonomous Decentralized Peer-to-Peer Telemetry (ADEPT) system. Basically this allows an IoT to run itself. For example, a digital ledger links a vehicle with a warehouse, so that they can talk and order new stock, with payment processed on delivery.
- Cost reduction: As mines operate all over the world, the expense of cross-border payments is a problem for the industry. Remittances are undergoing huge change thanks to blockchain. Not only could blockchain solve a security issue but it could also speed up the process of paying. DigitalX’s (ASX:DCC) mobile product AirPocket provides consumers secure overseas transactions from anywhere, in any currency.
- Streamline contracts: “Smart contracts” are a chain of commerce and a way of remotely policing workers. If a gold mine is in Cambodia or another developing country, and the firm is headquartered elsewhere, business standards can still be upheld everywhere. For instance, the world’s biggest mining company, BHP Billiton (NYSE:BHP), are using blockchain for their supply chain. They have a market cap of $112.92 billion, and certainly have some market muscle and could influence other, smaller players to follow suit.
The Accenture report continues, stating that blockchain applications make it easy to sign contracts electronically and without having to rely on a third party to verify whether it’s valid or not. Why? Because blockchain is a digital ledger, that makes it possible for it to keep track of every transaction and “safely encrypts” said information.
Blockchain in the mining industry: the future
According to a Globe and Mail article from earlier this year, Halifax start-up Peer Ledger’s blockchain-based Mimosi application is able to track precious metals within the supply chain “to ensure every milligram purchased by buyers has come from an ethical source and is not funding armed conflict in war-torn countries like the Democratic Republic of Congo.”
As noted on its website, Peer Ledger’s Mimosi platform uses blockchain to “instantly” ensure that its users know the origin of the precious and industrial metals.
Another example is the acquisition of Hill Top Security by Big Wind (CSE:BWC), who jointly announced in September that Hill Top will be creating its first Initial Coin Offering for the mining and metals sector, and had already received funding for development. In November, the companies announced that the cryptocurrency, called MineCoin, “will enable Hill Top to expand its current protection of company networks and communications to include the protection of company transactions.”
To conclude, far from hindering production, blockchain is a security solution that improves results and safety. Spreadsheets could be a thing of the past if uptake of blockchain continues. Mining is a dangerous job so anything that can be done to ensure good practice is a step in the right direction. Investors would would be advised to do further research the companies mentioned and capitalize on a future trend.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.