The verification mechanism depends completely on the personal trustworthiness of the seller. The ledger technology cannot improve the security of this crucial first step. Neither facial scanning nor GPS recording guarantees where the properly authenticated seller got the tantalum from. It could be from a controlled and certified mine, but it could also be blended with ore from other, illegal, mines. The consensus mechanism, which is at the heart of the blockchain technology, adds value only to transactions within the system, i.e.
the minerals have been admitted to the system. But this is not where the main concern lies.
Rare alternative for proving origin
Blockchain represents no “disruptive” progress over existing bag-and-tag traceability systems developed for the same minerals
. They all rely on identifying and trusting the seller, but use standard database solutions to track the flow of material through the system.
Other approaches such as analytical fingerprinting
of tantalum or adding markers at the molecular level in oil and gas engage with the raw material directly. They can – in contrast to blockchain – provide the proof of origin but are available only for some minerals due to technological requirements and cost.
This is not to say that blockchain is without merit. There clearly are business cases where the technology adds value. For example in commodity trading, where many parties are involved and cargos are often sold several times between sourcing and delivery, the technology can reduce transaction cost and improve transparency by having suppliers, logistics, verification, insurance and financial institutions perform their roles on the same platform.
Today, blockchain is close to the peak of the hype cycle of technologies with inflated expectations. Riding this wave helps to attract publicity and (donor) funding. But not necessarily to solve every problem at hand.