Most people and organizations strive to make the world a better place, and we’re no exception at Peer Ledger.
In particular, we believe we can improve the human condition by helping to end “conflict gold” – one of the most pernicious business practices on the planet. One of our prime business lines in MIMOSI, which uses blockchain to make sure everyone in the gold downstream supply stream – refiners, process0rs and end-users –know where their gold was sourced. It’s the first time ever that this industry has had such a failsafe system of sourcing precious metals.
This is important because conflict gold does so much harm and is so hard to detect. It’s a similar practice to “Blood Diamonds”, which are better known largely because of the 2006 Leonardo DiCaprio film of the same name. Both these businesses extract resources in combat zones and use the proceeds to finance war, usually in desperately poor countries. The miners and combatants are often children, and the mining process usually accompanies dreadful human rights and environmental abuses.
Conflict gold is primarily mined in the Democratic Republic of Congo, where various armies have been at war with one another for the better part of two decades. More than a million people have been displaced by the fighting, and the death toll has been staggering.
Conflict gold is a bigger problem than blood diamonds for two main reasons. First, the gold market is about five times the size of the diamond market. Gold is used in finance and jewelry, and there are also applications for the metal in electronics, dentistry and other segments of the global economy. The surge in gold price in the last decade has also served to increase demand for the metal.
The second reason is that it is far easier to hide unethical gold than an unethical diamond. Each diamond is unique, so it is possible to track each stone’s path to the marketplace. Gold is processed, melted down and formed into bars, drawn from a variety of sources. It’s much easier to mask conflict gold because it can simply be melted into bars of legitimate gold, and no one would be any the wiser.
Western governments have tried to tackle the issue of conflict gold, but it has proven difficult. In the U.S, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 required manufacturers to audit their supply chains and report use of conflict minerals, though a federal appeals court later watered down some of these provisions. And the European Parliament in 2016 ruled that all but the smallest transactions involving gold and other potential conflict resources must be fully sourced.
The problem has been how to track all gold back to its source and verify none of it has come from war zones. That’s the problem we have cracked at Peer Ledger.
We use blockchain, the technology underpinning the digital currency bitcoin, to fully validate each step as gold makes its way through the supply chain. For the first time, auditors, buyers or other players in the supply chain can check the progress of the gold, checking shipments, invoices, bills and other documents.
At Peer Ledger, our founders, investors and staff believe strongly in the social responsibility of corporations. We hope not just to do well but to benefit society in doing so. And our main focus in impact entrepreneurship is to end the scourge of conflict resources.