Can Blockchain Technology Save the Mining Industry from Cyber Threats?

We hear a lot about cyber security. Banks, credit card companies, credit agencies, and health plans have all been hacked, causing untold damage to their customers. The mining industry has not been immune to this disturbing trend. Here are just a few examples from Trend Micro’s Cyber Threats to the Mining Industry report:

Nautilus Minerals and Marine Assets Corporation (MAC) were victims of a cyber scam that resulted in Nautilus paying a $10-million deposit intended for MAC into an unknown bank account.
100GBs+ worth of data was stolen from the Detour Gold networks. 18GBs of compromised documents were shared on a torrent site.
Communications, metal detection, and mining technology firm Codan reported sales and prices of the firm’s metal detectors collapsed after hackers stole its designs and began manufacturing counterfeit metal detectors.

Mining company information is targeted by cyber attackers for myriad reasons, as explained in the Trend Micro report:

Insider information: Intelligence about a mine’s pricing data can help a competitor outbid the competition, negotiate a better purchase price, or change the terms of a takeover bid. Customer data is another prime target for theft.

Intellectual property: Data on production methods, mineral processing methods, chemical formulae, and custom software, can drastically reduce the R&D costs associated with developing a new mine.

Insight: Knowledge about governance policies, decisions, and the decision-making processes of corporate executives can be applied to the local mining industry.

Reporting databases: Mine-monitoring systems provide real-time status updates of the mining operation.

Other valuable data: Exploration data is expensive to generate and is key to the company’s future growth and success. Ore reserve and production data is the main source of a mine’s value.

Is blockchain the answer?

Blockchain is the digital technology behind bitcoin. As explained in the Accenture.com article, Blockchain Technology in the Mining Industry, blockchain allows individuals to sign contracts automatically and electronically, without having to rely on a third party—such as a bank—to verify the contract’s validity. The idea is that eliminating the middleman reduces the exposure of data to hackers. Blockchain records and encrypts all transaction information.

What is blockchain technology and why is it secure?

The website www.coindesk.com offers a wealth of information explaining how bitcoin and blockchain work. Following is a summary.

Three principal technologies combine to create a blockchain:

1) Private key cryptography. This component of blockchain technology creates a secure digital identity reference based on possession of a combination of private and public cryptographic keys.

2) A distributed network with a shared ledger. Much of the value of the bitcoin blockchain is that it is a large network where validators reach a consensus that they witnessed the same thing at the same time using mathematical verification.

3) Network servicing protocol. Bitcoins and their base units (satoshis) must be unique to be owned and have value. To achieve this, the nodes serving the network create and maintain a history of transactions for each bitcoin by solving proof-of-work mathematical problems.

A blockchain database has a history of itself. Changing an entry in the database would require changing all of the data that comes afterwards, on every single node. In this way, it is more a system of record than a database.

For more news, visit the Cement, Coal & Minerals online learning center and check out the application notes, infographics, product spec sheets, videos, case studies, and eBooks dealing with all aspects of the mining industry, from exploration through processing, mineral analysis, and bulk weighing, monitoring, and sampling systems, and more.

This post is for informational purposes only. We do not endorse any technology in this article, including blockchain or bitcoin.