Blockchain , the technology behind cryptocurrencies , is helping track the world ‘s gold bar supply chain .
Two major gold groups on Monday launched a pilot program to digitally monitor gold moving through the global supply chain as a way to ensure authenticity and bolster transparency within the precious metal market.
The London Bullion Market Association and the World Gold Council have launched a pilot program to digitally track the movement of gold through blockchain, the technology behind cryptocurrencies.
The golden chain
Thanks to this system, managers can see the complete history of gold bars from the mine to the vault, gold that ultimately goes to so-called end consumers such as jewelry manufacturers.
The groups want to protect the market against counterfeit gold or illegally mined gold .
“Consumers and investors want to know that their gold has been produced responsibly and sustainably, and tracing the origin of gold bullion will help enforce the highest standards throughout the supply chain,” said the Council’s director general. World Gold, David Tait, in a statement.
The LBMA and WGC said the plan over time is to encourage all major industry players to adopt blockchain technology so that all gold bars are digitally recorded and tracked.
In the world of cryptocurrencies, blockchains keep vital information of all processes: they hold valid records and transactions from a previous block and contain their own records, giving it a specific place in the entire network. If all the blocks have a record of each other, a hacker would have to try to exploit each of the nodes in the chain to make a true alteration in the blockchain, an almost unlikely event.