Legal smart contracts for derivative trading in mining

This research demonstrates financial derivative trade of unprocessed materials, for the mining industry through legal smart contracts. Within the mining supply chain, a stock of mined resources can reside in a mineral stockpile for over twenty years without gaining financial interest and without und...

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Bibliographic Details
Published inKnowledge engineering review Vol. 35
Main Authors Wise, Julian Adam, Chan, Meng Chak, Tadic, Dihon, Miles, Stephanie, Cornish, Jack, Sellers, Ewan, Brenecki, David, Dzakpata, Isaac, Murugesan, Barti
Format Journal Article
LanguageEnglish
Published Cambridge, UK Cambridge University Press 2020
Subjects
Asset acquisitions
Automation
Blockchain
Contracts
Cryptography
Financial management
Fraud
Futures
Information systems
Minerals
Miners
Mining industry
Over the counter trading
Peers
Purchasing
Software
Stockpiling
Supply chains
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Summary:This research demonstrates financial derivative trade of unprocessed materials, for the mining industry through legal smart contracts. Within the mining supply chain, a stock of mined resources can reside in a mineral stockpile for over twenty years without gaining financial interest and without undergoing the mineral extraction process to derive value from the asset. This research elaborates on a blockchain solution implemented to increase miners’ short-term cash flow for business operations through the issuance of derivative assets on mineral stockpiles which can be traded through legally binding smart contracts. The system is the first to enable mining companies’ access to the underlying asset’s value earlier in the production lifecycle through smart contract technology whilst providing hedge funds with access to new financial products for investment portfolios.
ISSN:0269-8889
1469-8005
DOI:10.1017/S0269888920000144