In recent years, the word ‘blockchain’ has become synonymous with the latest disruptive technology the world has embraced. Though it has diverse applications, blockchain has gained prominence in the financial sector, which calls for the highest levels of security for data transmission. The staggering rise of crypto-currencies highlights the increasing acceptance of this technology.
So what is blockchain?
The blockchain is simply a growing list of records or blocks which are linked by cryptography. It is an open ledger which collectively records transactions in a peer-to-peer network. Each of the computers connected to this network is called a node. Blockchain adheres to specific protocols for inter-node communications and validating new blocks.
A more simple explanation goes like this: Think of an MS-Word file being edited and then shared with a second person for modification. Till the Word file is with the second person, the first author can neither view the modified version nor edit it. The file has to be obtained from the second person to do so. Now, let’s think of a Word file available over a network accessible at all times by everyone and can be edited by anyone who wishes to and has the authority, something like ‘Google Docs’. It does not call for much rumination on how such a metamorphosis can be favourable for businesses worldwide, involving numerous legal contracts and their execution.
Blockchain technology has several advantageous features like its built-in robustness and incorruptible nature. There is no single point failure because no single authority controls the information stored through blockchain. Data is embedded within the specified network as a whole, and by definition, it is public in a broad sense. It is incorruptible as alterations cannot be made by changing data at any one node; it has to be altered on all nodes present on the network, which would require enormous computing power, though theoretically possible, but not practically. It, thus, eliminates the risks arising from a centralised data repository.
Why blockchain?
Since 2010, there have been as many as 17 instances of cyber-attack on 22 separate entities in the mining sector. These attacks accounted for a range of intentions such as thwarts in mergers and acquisitions, intellectual property stealth, and theft of personal information. According to Symantec’s 2016 report, the mining industry is the number one target from spam emails, and correspondingly one-third of these emails contain malignant content. Blockchain technology can help mitigate these risks by decentralising the data storage and thus making it much difficult to get hold of central storage and alter data. However, the application of this technology extends much beyond than simply storing proprietary data. A primer of the emerging uses is outlined in this article.
Governance
Blockchain can be used for effective governance by making data transparent to all the stakeholders as it can be accessed by anyone connected to the node network and in extended cases, by anyone connected to the internet.
Supply Chain Audit
A blockchain ledger can be maintained wherein the end product would carry a signature of the origin. This is more prominent in the diamond mining industry where there are chances of desegregation of legally mined diamonds and the one procured unethically. A UK based firm, Everledger, has created digital records of over two million diamond stones with dozens of attributes inscribed by laser on the crown or the girdle of the stone. Such initiatives can and are already replacing paper-based tracking. Thus, instead of obtaining certificates on quality and ethics, a potential buyer, in a few years time and with the development of further advances, may hope to gather all the information of a stone just by scanning it with a smartphone.
Internet of Things (Iot)
The emergence and the subsequent usage of Autonomous Decentralized Peer-to-Peer Telemetry (ADEPT) are revolutionising how the whole process of maintenance of assets and consumption of resources is carried out in the mining industry. This sector has a number of consumables such as diesel, tires, electricity etc. Predictive maintenance is quite a challenge too due to a huge intake and maintenance of an inventory of spares. A combination of sensors, software and network, can trigger automated contracts sent out to vendors when these essentials run below a preset value. The payment is similarly automated when the order is received. This can not only reduce time and costs but also provide an excellent base for data analytics.
Immutable Record of Major Data
The integrity and authenticity of important data such as wellbore sample information and lab analysis reports are challenging to maintain as these are handled by a number of internal and external parties. Presently, these are shared through spreadsheets and databases and hence are prone to alteration either due to human-error or malign intentions. Blockchain can safeguard against such possibilities by providing a base for records that is incorruptible. BHP Billiton Ltd., a market leader, is already using this technology for the movement of wellbore rock and fluid samples and to secure real-time data generated during the delivery of mined ore. Previously, tracked by using spreadsheets, the new method is driving internal efficiencies upwards.
The blockchain is bound to have even more profound usages in the coming times. Though disruptive, in a capital-intensive industry like mining, a movement towards it has to be lead by even more elaborate research and implementation at a much smaller scale before being applied to the whole industry.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy, position,view or opinion of any organization the author is part of.