As blockchain moves away from its Bitcoin origins and moves into the mainstream, big companies are using its technology to ensure their supply chains are clean and free of human right abuses.
Last year was terrible for those who believed and invested in cryptocurrencies, but 2018 was also the year that blockchain technology made a huge leap into the consciousness of business.
FinTech companies were naturally the first sector to take an interest in its potential and benefited from it. The technology has never been hacked, security was ring-fenced and its value as a system of trust was immutable.
People also began to understand what blockchain was; a database of a decentralised community as opposed to a central authority (such as a bank) that validated its archive.
Blockchain itself is two elements working hand-in-hand the ‘block’ referring to a number of transactional records while the ‘chain’ links everything together. Once a blockchain transaction has been completed, it cannot be reversed, so nobody can ‘cheat’.
Blockchain is now moving from the financial sector into other areas such as road transportation and shipping, where huge logistics complexity is being streamlined and simplified.
This development in the above industries will take time based on that very complexity, but the one area where blockchain is making huge strides, let along leaps, is the ethical sourcing of natural materials.
This so-called blockchain-for-good effect means that companies such as car manufacturer Ford and diamond company De Beers can use blockchain to ensure its supply chains are clean and free of human rights abuses.
In the first instance, Ford needs cobalt for its forthcoming range of electric cars that need ion batteries to charge them. These self-driving cars will create huge demand for the product and, like many companies, Ford knows its customers demand transparency.
Cobalt is already a super-material that is vital for devices such as mobile phones and laptops, but its production has come at a cost.
In the Democratic Republic of Congo (DRC) where cobalt is most prodigious, the conditions for miners digging cobalt out of the ground are medieval. Children, as well as adults, undergo torment in doing so, it is to the shame of the human race.
Together with South Korean cathode maker LG Chem and China’s Huayou Cobalt, Ford is using IBM’s blockchain platform to monitor cobalt supplies from DRC.
The project has been quietly under way since December. Starting with industrially mined cobalt in Congo, it is monitoring supplies all the way to lithium-ion batteries for Ford vehicles.
The pilot is expected to be completed in the middle of 2019 and is being overseen by responsible-sourcing group RCS Global, which says the IBM blockchain platform could also be used to include other minerals.
It will also allow miners, those children and adults previously mentioned, to join a blockchain-based network of validated participants.
Refreshingly, Ford and IBM are not alone. Last year, the world’s biggest diamond producer De Beers said it had tracked 100 high-value diamonds from miner to retailer using blockchain.
It was the first effort of its kind to clear the supply chain of imposters and conflict minerals and to prevent ‘blood diamonds’, those stones that are unverified and originate from conflict zones where gems may be used to finance violence.
Set up in early 2018, five diamond manufacturers worked with De Beers to develop the blockchain platform called Tracr, which has since expanded with other major companies signing up.
Tracr’s mission is to provide consumers with confidence that registered diamonds are ‘natural and conflict-free’, improving visibility and trust within the industry and enhancing efficiencies across the diamond value chain.
It also supports the diamond industry’s existing initiatives and regulations to ensure consumer confidence in diamonds, including the World Diamond Council System of Warranties, Kimberley Process Certification Scheme and Responsible Jewellery Council Code of Practices.
Aside from the banner-waving efforts of big conglomerates such as Ford and De Beers, the charity sector is also beginning to benefit from blockchain-for-good initiatives.
As mentioned in Forbes at the end of last year, the Disberse platform is a blockchain startup that lets donors track their donations, with UN agencies such as the World Food Programme showing an increasing interest in blockchain products such as this.
Moreover, Humaniq says it is developing a platform to connect two billion unbanked people to the global economy.
One such product is Humaniq for Good, which connects global charities and local non-profit groups to provide philanthropic aid directly to those who need it in Africa, as well as helping any organisation wishing to donate to philanthropic causes from raising funds to distribution.
While 2018 was certainly the year that Bitcoin floundered and its exchange price crashed, the technology behind has a future that could transform the way the world works, let’s hope so anyway.
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