Rare metals and elements as well as gemstones are expensive because their supplies are limited while demand for them is consistently high. Unfortunately, the biggest reservoirs of precious stones and rare metals are found in regions and countries with awful human rights records, or are flat-out in the middle of a war zone. Blockchain-driven technology is able to guarantee these items’ provenance both to the merchant and reseller, and ultimately, the end customer.
Fuel for the industry
Precious metals include elements such as gold, copper, platinum and silver. Most of them have industrial applications, and as we are in the way of the 4th Industrial Revolution, demand keeps rising. Other rare elements include radioactive isotopes used to power nuclear reactors and scientific research, and elements like coltan, which is an essential building block of smartphones.
Diamonds are a little different in that they present a smaller field of industry applications (e.g. bore heads on giant drills that are driven deep into the earth’s crust). Most of their value comes from human attachment. Simply put, diamonds are pretty and they are a marker of status. This is not trivial. DeBeers, the world’s largest diamond conglomerate, raked in a hefty $6.1 billion in revenue in 2016 alone.
The paradox of plenty
The paradox of plenty, also known as the resource curse in economic theory, holds that regions with exceptional economic value are often the theaters of the world’s worst abuses, corruption and death precisely for this reason: everyone wants in on the trade.
In turn, this creates an ethical problem for companies that extract or use these resources, and looms large in the mind of individual customers as well. By now, everyone knows what a ‘blood diamond’ is. But there is also blood coltan, blood gold, blood uranium – sadly, the list is quite long and depressing.
The power of provenance
While classic diplomacy, foreign relations and quality control are good tools to help reduce conflict and unrest in these areas – many of which are in Africa, from the West Coast through the Congo basin all the way to South Africa – Blockchain could provide another safety bolt. And the sector is already paying attention: at its most cynical, even they know bad reputations can harm sales.
If gold ore is dug up, for instance, it could immediately be entered into a specific Blockchain-driven tech platform that describes the ore’s origins, authenticated by its finder. As the ore makes its way through the value chain, resellers, industrial corporations and even individuals can always check back and know they have ore on their hands that was mined ethically.
Closing the loop
Already, many landfills, mostly in poorer African and Asian countries, are being mined by poor or unemployed people for discarded smartphones so that the coltan can be reintroduced into the economy. A coltan Blockchain could tell the new buyer where exactly their new source is coming from. This closes and important loop in a circular resource usage scheme, where “I just found it somewhere” will no longer do, or may not be even possible anymore at all.
In the diamond industry in particular, adding Blockchain to the quality control mix isn’t a big step. It already employs several certification and tracking mechanisms to ensure that their resources are extracted ethically. Of course, it has to be done right from the start – if you start out with a fake Blockchain data element, you might as well start over.
Why is Blockchain so much safer then?
While vulnerabilities exist – e.g. if more than 50% of an entire Blockchain is ‘convinced’ to add a falsified element in lieu of the real data, then that falsehood will be accepted as truth and will be lodged into the Blockchain forever – they are very small compared to simple Office documents or paper trails that need to move through several bottlenecks where opportunities for abuse are rife.
Because Blockchain is a distributed technology, no one ‘owns’ it, there are no central databases that can be tampered with, and its natural encryption algorithms are much safer than traditional cyber-security measures. Since new blocks need to be authenticated by the entire Blockchain and each block carries the information of all preceding blocks, this builds a strong chain of almost incontrovertibly verifiable data.
A force that keeps growing
Blockchain tech doesn’t just get better with age because more added data makes it stronger (as opposed to traditional authentication systems, where more data generally ends up as ‘dark data’, or, in layman’s terms, data people can’t remember existed in the first place). It’s also still spreading its wings in terms of realizing its true calculation power and speed.
In cryptocurrencies – still the Blockchain application most people will know – RaiBlocks can process 7,000 transactions per second (tps), while the very first, Bitcoin, can do about 60 tps. This is all the more astounding if you consider Bitcoin launched in 2009 and RaiBlocks in 2017. That’s a 117-fold increase in processing speed on a timescale of a mere 8 years. It took twice that much time for the top-end computer systems to achieve this improvement in computing speed (from the IBM 706 in 1954 to the final issue of the CDC 6000 series in 1970).
Curious about the future?
That’s good, because we are, too. Perhaps you work at a resource extraction or refining company and would like to know more about how Blockchain can make your business more secure and ethical. Perhaps you are an invested end customer (individual or company) and want to put some headaches to rest. Whatever the case, we’re sure we can have an interesting conversation with you!
You can reach out to us at any time via firstname.lastname@example.org. Our mission is to help the world truly get good at getting the most out of Blockchain technology. It’s not sorcery, it’s not magic, and we can help you on your road to it.