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Challenges & Solutions
for Blockchain technology adoption in the Precious Metal Industry
The success of a blockchain solution in supply chain management largely depends on user acceptance. Since blockchain technology is relatively new, a lack of proper knowledge among the public and among actors at each stage of the supply chain can affect its use.
Limited Access to Technology:
Most of the upstream activities in supply chains often take place in developing or less developed countries where there may be limited access to technology. To use blockchain technology for assurance, it is necessary to have certain IT infrastructure in place. This can be infeasible in remote areas, and extending blockchain technology across the various stages of the supply chain can be a challenge, especially in developing and underdeveloped countries.
Questions arise pertaining to the implementation of such a system. What level of sophistication is needed? To what level should material be traced? Are there existing blockchain platforms that a system could be built on? What data should be recorded? There is a risk that demand for data will increase once downstream companies have access to it.
Blockchain is currently experiencing a ‘hype cycle’ and has become a buzzword without sufficient feasibility research being conducted. Expecting blockchain to patch or fix a flawed supply chain management process might put the wrong expectations on the technology seeing as though end-to-end processes are always multifaceted and pose challenges beyond technology.
Education and Training:
Education and training are crucial for the widespread adoption of blockchain technology. By increasing awareness about the technology and its potential benefits, more individuals and organizations may be encouraged to adopt it. This can be achieved through various means such as training programs, workshops, and seminars. These educational initiatives can be designed to cater to different levels of knowledge, from beginners to advanced users. They can cover a wide range of topics, including the basics of blockchain, its applications in different industries, and the technical skills needed to develop and implement blockchain solutions. In addition, these programs can also address common misconceptions and concerns about blockchain, thereby promoting a more accurate understanding of the technology.
In regions where access to technology is limited, infrastructure development is a key step towards the adoption of blockchain. This can involve initiatives by governments to improve internet connectivity, provide access to digital devices, and promote digital literacy. Partnerships with tech companies can also be beneficial, as these companies can provide the necessary hardware, software, and technical expertise. In addition, infrastructure development can also involve the creation of regulatory frameworks that support the use of blockchain, such as laws and regulations related to data privacy, cybersecurity, and digital transactions.
Before implementing blockchain technology, it is important to conduct thorough feasibility studies. These studies can help identify the specific needs and requirements of the intended users, the potential benefits and drawbacks of using blockchain, and the resources needed for implementation. By doing so, feasibility studies can prevent unrealistic expectations and ensure that blockchain is used in the most effective and efficient way. They can also help identify potential challenges and risks, allowing for the development of strategies to mitigate them.
In areas that are prone to conflict, it is crucial to develop robust tools and mechanisms to ensure that blockchain projects do not inadvertently finance or exacerbate conflict. This can involve the use of blockchain to track and verify the source of funds, thereby preventing their use for illicit activities. In areas that are not affected by conflict, risk assessment should focus on other major risks, such as child labor, environmental damage, and impacts on local indigenous communities. Blockchain can be used to monitor and document these risks, and to ensure that appropriate measures are taken to address them.
Promote Sustainable Practices:
Blockchain technology can support sustainable business models and practices in various ways. For instance, it can enable greater transparency and traceability in supply chains, allowing consumers to make more informed choices and encouraging businesses to adopt more sustainable practices. It can also facilitate the sharing of knowledge and resources among supply chain operators, thereby promoting collaboration and innovation. Furthermore, blockchain can be used to verify and reward sustainable practices, such as the use of renewable energy or the reduction of waste.
Integration with Other Technologies:
Blockchain can be integrated with other technologies to enhance its capabilities and applications. For example, machine learning algorithms can be used to analyze data stored on a blockchain, providing insights that can be used to improve decision-making and efficiency. The Internet of Things (IoT) can be used to collect real-time data from various sources, which can then be stored and verified on a blockchain. This integration can enable a wide range of applications, from smart contracts and automated transactions to decentralized networks and digital identities. By integrating blockchain with other technologies, it is possible to achieve technological sustainability and fulfils the increasing needs of various sectors.