Building a Blockchain Platform for the Mining Industry
According to international research, the Blockchain market is predicted to grow to 39.7 billion USD in 2025. This rapid growth creates an increasing need for Blockchain platform development. The banking sphere was the first to invest in and adopt this technology; however, other industries, like mining, also keep up with the latest tech trends.
Here we will discuss what Blockchain technology is, how it works, what the Pros and Cons of this technology are, and how Blockchain is changing mining and metal supply chains.
What Is the Blockchain Origin?
Blockchain technology was first mentioned in 1991 by Stuart Haber and W. Scott Stornetta. These mathematicians wanted to create a system where document timestamps could not be tampered. In the late 1990s, Cypherpunk Nick Szabo proposed using Blockchain to secure a digital payment system known as bit gold.
Thus, Blockchain is a record-keeping technology created to prevent the system from being hacked or stored data from being forged, making it top secure and immutable. The Bitcoin cryptocurrency was the first widespread application to use Blockchain successfully. For this reason, Blockchain is often associated with Bitcoin and its alternatives.
Nowadays, Blockchain has various working functionalities apart from Bitcoin. Healthcare, fintech, supply chain, logistics, mining industries, and many other fields use this technology to build applications and platforms.
Pros and Cons of Blockchain in Supply Chain
To have a bigger picture, let’s dive deep and see the advantages and disadvantages of this popular technology in the supply chain.
Pros come first.
- Decentralized structure. Blockchain supports sharing data within a business network where no single entity is in charge.
- Trust. Blockchain creates trust between different business entities when they engage in secure transactions or data sharing.
- Innovative technology. Different industries implement blockchain-based solutions to solve business problems and improve long-standing, outdated practices.
- Improved accuracy. This technology demonstrates high data accuracy, removing or minimizing human involvement in the verification process and protecting against data manipulation.
- High speed. Replacing remaining manual processes in transactions and eliminating intermediaries, Blockchain can handle transactions much faster than conventional methods. In some cases, in seconds or even less. Still, time varies, depending on, for example, how large each data block is.
- Reduced cost. Blockchain technology reduces manual tasks, such as aggregating data, simplifying reporting processes, and cutting costs by eliminating vendors and third-party providers that traditionally provide the processing that Blockchain can do.
- Security. The Blockchain nature makes the system highly secured thanks to the decentralization of the data storage. Also, it makes fraud impossible; as long as each block of the chain contains info of the previous one, so any interference can be tracked. [Разрыв обтекания текста]
However, we need to mention some Cons of the Blockchain technology too.
- System support. Many blockchain-based solutions need help from other systems and processes to verify that the data being added to Blockchain is accurate — for example, the use of Blockchain for the supply chain management.
- Existing systems replacement. Blockchain-based apps require every party involved in the network or ecosystem to use this system. It means it requires everyone to invest in the new technology implementation and process changes.
- Uncertain regulation. Despite the technology’s decentralized nature, businesses that use the Blockchain technology often require some central control. So, there is still a question about who will address breaches in trust and protocols.
How Blockchain Is Changing Mining and Metal Supply Chains
The mining and metal market has suffered the inefficiencies of paper-based, manual processes that have impacted industries’ performance for a long time.
The need for transparency and strict ESG compliance regulations has pushed this sector towards adopting the Blockchain technology and solutions to address these challenges. MineHub, FOBI AI, Glencore, Aspen Technology, and Minespider are leading companies turning to Blockchain solutions.
This innovative technology brings transparency, scalability, reliability, and traceability to mining supply chains allowing these companies to track the metals and mining supply chains for transparency in carbon emissions, water use, human rights, and finances.
Let’s move on to the actual steps needed to build a Blockchain platform for a mining company.
Tips to Build a Secure Blockchain Platform
The supply chain that deals with mining and raw minerals like tin, tantalum, cobalt, or gold is very complex. We can divide this process into several steps.
First of all, the minerals are mined, then a transporter delivers the minerals to a processor. The processor makes all preparations for the manufacturing process. Finally, transporters mix minerals from multiple sources before they make it to a processing facility. And this complex process requires high tracking transparency based on the Blockchain technology.
Let’s see the main steps a mining business can take when building a blockchain-based solution.
- Find a professional software development team with experience and experts in this domain;
- Conduct profound research on popular platforms and Blockchain-based solutions on the market and in your niche;
- Select the most suitable functionality for your business needs;
- Consult about the best-suited technology stack and software architecture to support the selected functionality;
- Build a prototype and MVP version to check if this solution meets the needs of your business and its end-users;
- Develop, deliver, and test the application.
In our original article, you’ll find more practical insights from our developer based on the Minespider case study. Follow the link to read it in full.