The Golden Blockchain: Building Trust in the Gold Ecosystem

The reputation of the gold mining industry is historically held in low regard. An industry that is by no means essential; the gold mining legacy of distrust, damage to the environment and dud investments has led to every level of the industry faced with a degree of negativity; and it has certainly left a bad taste in the mouths of those involved ever since.

History is one thing, but even today the general perception of gold mining is that these companies are at huge fault for causing environmental problems, negative impacts on communities, and being involved in questionable practices abroad. Coupled with the mounting pressures on brands to deliver products which use responsibly sourced materials, the need for a more trustworthy ecosystem is paramount.

Of course, in recent years we’ve seen various solutions emerge to attempt to improve trust and accessibility to gold . But with fluctuating results in the bid to create security and stability, as well as a lack of economic empowerment for those wanting to invest, but aren’t fortunate enough to sit high in ivory towers, these efforts have so far been largely unsuccessful.

However, by introducing Blockchain technology to the gold mining industry, the market infrastructure for all of these problems — refining, traceability, storage, exchanges and financial intermediaries — can become greatly improved. The key is a decentralised, “golden source” of truth for every member of the market.

So what does this “golden source” of truth provide?

• A track record of a digital asset without the need for a trusted third party
• Fewer errors, delays and risks — increasing reliability and lowering the need of reconciliation
• More flexible market structures, thereby increasing innovation and streamlining reporting
• Data integrity assurance across all participants’ activities

For example, our USAVE ecosystem is engineered to remove this tarnished reputation by securing peoples’ trust in gold. The global solution can help to track, secure and market eco-responsible gold using Blockchain technology — benefiting everyone involved in the process, from the initial mining itself, all the way to the exchange — and every step in between.

This Blockchain solution is designed to deliver network-wide integrity guarantees; it’s a log of commitments and notifications, allowing the auditability of the distributed data stores. In doing this, the layer introduces a complete set of valid transactions — the “golden source”, with three primary functions:

• To serve as the authority of relative order between dependant transactions
• To ensure uniqueness of mutually exclusive events and maintain the state of the ledger data (derived from the stream of transaction data)
• To serve as an assured notification mechanism. Any stakeholder affected by a state change of data or contracts must be notified. They are sure they will be made aware that this state change has occurred.

Once this model is introduced, the entire process is simplified. Centralised data between participants, operators and regulators becomes a thing of the past; everything becomes subservient to the public ledger. This supply chain provides a responsible, environmentally friendly commodity all the way from miner to vault, and finally, despite a history of unreliability and corruption, a new level of confidence in the product’s authenticity, value and ownership arrives.

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