How to apply blockchain technology to the battery supply chain
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Cobalt extraction takes place in the Congo, where raw materials are washed by hand
From a processor or end user perspective, it is very difficult, if not impossible, to understand the entire supply chain and know where the material entering the battery supply chain is coming from or going. It is virtually impossible to determine the impact of sourcing, processing and manufacturing the above products on their environmental, humanitarian and social footprint.
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1. Application of blockchain technology
As we move from the initial hype about blockchain into actual implementation, we see real benefits in use cases. One of these use cases is in the supply chain. Asset management throughout the end-to-end transaction lifecycle is a challenge. Various players are involved in the actual supply chain, all with their own records, which often creates inefficiencies and safety concerns. By applying blockchain technology, all records can be stored in a single source of truth, reducing errors, reducing the risk of corruption and streamlining business processes. The need for intermediaries is reduced, further reducing risk and lowering transaction costs.
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2. Product source
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Solar mine base
Once a diamond is mined, a digital version is created and traced from the original diamond at the mine to the end customer. A diamond in a jewelry store on London's Hatton Street has its own digital version on the blockchain, its journey from the rough, uncut gem that was once worth much less to the round brilliant - the finished product.
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3. Interdependent files
Public blockchains are available to everyone and often raise concerns about data security and privacy. This challenge is addressed by the concept of a secure one-way hash. Each document generates its own unique identifier (hash), which has value and is publicly available. The hash has little value to an outside human viewer, but an auditor with the original document can verify that the hash is authentic. The purpose of hashing is to allow public verification of private documents.
The document flow in the battery materials supply chain is complex because many documents are dependent on the correct completion of other documents in the chain. Blockchain is an ideal environment for managing such a complex flow of documents, as all relationships between documents can also be publicly verified. If documentation is missing, incomplete, or damaged, it is immediately known and the following steps cannot be completed.
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4. Compliance, Audit, Rules
By applying blockchain technology to the supply chain, any stakeholder who needs visibility into the processes and documents in any given supply chain can have immediate, standardized and uninterrupted access to the truth about any material lifecycle . This reduces the overhead required to ensure compliance and mitigates the risk of insufficient disclosure.
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5. Spillover benefits
Raw material producers and manufacturers are located far from each other in the supply chain and often have no idea they are in the same chain. A blockchain-enabled supply chain opens a window for all linked actions and actors to be visible. New relationships, even partnership opportunities, become possible.
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6. Transparency goals
At the end of the day, transparency equals trust, which is the most important and core function of bringing blockchain into the battery material supply chain. On its own, this is reason enough to invest in blockchain solutions. The metals supply chain industry is using severely outdated technology and needs the kind of digital disruption that blockchain provides.
