The adoption of blockchain technology is growing and has seen acceptance throughout various global industries. Its use is so widespread that even the World Bank has used it for settling transactions.
While banking and finance see a logical progression into blockchain, another industry, which could see a disruption in the near future, is the mining industry.
Gold and precious metal mining in particular, could see a huge boost in trust, as well as efficiency, if blockchain technologies are adopted.
With gold being used in industrial applications, ranging from smartphones to cars, intelligently tracking its supply is now more important than ever.
Consider for a moment the journey a gold nugget takes along its long supply chain — from mine to consumer. Mining.com describes how gold will cross several industries, including manufacturing, legal, regulatory, financial and finally retail.
Each of these individual sectors will have their own ledgers as well as checks and balances.
All of these, however, whether physical or digital, are vulnerable to certain risk factors such as fraud, hacking, forgery and various human errors.
Through blockchain technology, the possibility of these incidents from happening is reduced dramatically. All transactions will be decentralised, immutable and transparent.
Anyone involved in the supply chain will be able to see where and when the metal was mined, who the actors involved are, at every step of the way.
One California-based company, Emergent Technology Holdings, is looking to take this concept to the next level, by building an ecosystem of responsibly-sourced gold from conflict-free zones.
The company is aiming to digitally encode the gold supply chain with the help of blockchain, to guarantee that gold that is mined responsibly.
Mitchell Davis, the company’s chief commercial officer, told CNBC that by attaching cryptographic seals to the gold, mining companies can track their assets along every point along the supply chain.
Once the gold is out of the mines and refined, other companies (like Tradewind Markets) will seek to use blockchain to help investors more easily trade the precious metal.
President and co-founder of Tradewind Markets, Matt Trudeau states that the gold market is fragmented and manual, with gold stored in commercial and sovereign vaults in different places around the world.
Since there isn’t an electronic exchange or clearinghouse for precious metals, the company aims to harness blockchain to do for gold what the technology has done for cryptocurrencies — create a decentralised and transparent method of tracking transactions.
The result is a more secure and efficient system of supply and trading, which benefits the gold market.
Gold has always been very expensive and in high demand. It is still classed among the top precious metals in the world. It comes as no surprise then, that FXCM details that gold is still a precious commodity traded in a variety of ways.
These can include trading through futures, and contracts for difference (CFD). In the US, for instance, traders will invest in gold over-the-counter through the New York Commodities exchange.
Outside the country, CFD trading allows traders to speculate on the price and fluctuations of gold.
With a secure gold supply backed by blockchain, gold trading will see benefits such as easier trading, reduced trading fees and a more stable market.
This post is credited to cryptonewsasia Image source: cryptonewsasia