Sonata Capital
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Sonata Capital

Blockchain Technology Is Improving Ethics In Industrial Operations

Technology is making major industry increasingly responsible.

Blockchain technology may prove to be as important to humanity as the internet has been. Although this is a bold statement, the possibilities for blockchain are so profound that it may eventually impact many parts of our human experience. In the future, we may look back and term our current era — the blockchain age.

We are only at the beginning of our journey towards understanding how the blockchain can impact our lives. One of the biggest opportunities is to use the technology for improving the ethics and responsibility of industrial processes. Some of the biggest gains are currently being made in the mining and distribution of mineral resources.

Blockchain technology isn’t just a more efficient way to settle securities. It will fundamentally change market structures, and maybe even the architecture of the Internet itself. — Abigail Johnson

One of the oldest industries we have is that of mining. Humans have been mining minerals for myriad uses since our earliest days. As blockchain technology develops it is interesting to observe how it is being implemented in this ancient industry. Modern mining is a complex process and the accurate logging of activities on blockchains will improve both safety and profits for miners.

Of greater importance than profit is the potential for blockchain technology to improve transparency in mining. Our global economy is becoming increasingly educated on the impacts of irresponsible mining and we are starting to demand responsibly produced products. Tesla’s recent announcement that it is ready to offer a “giant deal” to responsible nickel miners is one example of industry promoting responsible mining activities. Tesla realised that producing a vehicle which claimed to be environmentally friendly was untenable if the raw materials used for production were not ethically sourced.

Blockchain technology is able to open a window onto the entire process of production and procurement. Many mining industries have been rightly criticised for inappropriate practices such as child labour and environmental destruction. Effective use of the blockchain could help to eliminate some of these issues.

The tracking of raw materials through the supply chain is now possible with the blockchain and is being tested in the Democratic Republic of Congo with cobalt mining. This project aims to ensure that the cobalt from these mines is not being mined by children. In this project, artisanal miners are vetted to ensure that they adhere to strict policies prohibiting the use of child labour.

Every bag of cobalt that these miners produce can be sealed in bags which are assigned a unique tracking number. Using mobile phones miners can then enter each bag’s number onto the blockchain including details such as date, time, weight and potentially even a photo of the bag. As the individual bags of cobalt move along the supply chain towards the smelter, information associated with their handling and sale can be updated on the blockchain. In theory by the time the bags reach the smelter every aspect of its production and transportation has been added to the blockchain which can then be vetted.

A similar system is being implemented for diamonds by the world’s largest diamond producer De Beers. The aim is to ensure that diamonds are sourced from locations free from conflict. This will guarantee that their sale does not generate revenue which is used to fund violence. Each diamond within the network will be assigned a unique identity which includes its origin, weight, size and quality. As the diamond moves through the supply chain it is registered on the blockchain until it reaches the point of sale. As with many blockchain implementations, the system is elegant in its simplicity but if well executed highly effective in eliminating undesirable actors.

The opportunities that the blockchain is bringing to improving mining operations highlight how the technology could be used in other industries. An educated global marketplace is demanding higher standards from businesses. The two key elements being demanded are accountability and transparency. The blockchain provides us with the framework to achieve both of these goals and we are starting to see how it’s broader implementation could improve many aspects of global business.

Sonata Capital is registered in the Labuan International Business & Financial Centre, and invests in companies successfully exploiting the vast opportunities of the digital economy.

100% of the equity in our funds have been tokenised, and will be listed on digital securities exchanges in Labuan and elsewhere. The equity of Sonata Capital Ltd (LL16076) has also been tokenised, and the rights to the equity is represented by the SONATA security token issued on the Ethereum network.

Visit our website, join our Telegram chat, or contact support@sonata.capital for more information about our company and funds.

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Sonata Capital

Sonata Capital

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A collection of actively managed, tokenised, and exchange traded investment funds across asset classes and sectors