Once upon a time, diamonds were the gold standard in the engagement ring industry and the most desirable of all stones, but in recent years they’ve fallen behind more sustainable and affordable stones. One reason: increasing awareness of the role conflict plays in sourcing diamonds. Buyers don’t want to play a role in that violence.
Luckily for the diamond industry, big data may have found a solution to the diamond’s decline. By providing reliable stone tracking, buyers can be certain they’re acquiring ethical gems with no conflict history.
Beyond The Kimberley Process
For the past 17 years, the diamond industry has relied primarily on the Kimberley Process, a UN-based process for removing conflict diamonds from the global sale chain. It’s a good system but relies on government buy-in and a narrow definition of what constitutes a conflict diamond. By embracing more extensive digital documentation, however, buyers can be certain their diamonds are actually ethical.
Overall, the Kimberley Process doesn’t provide much information about diamond provenance, which is the heart of ethical purchasing. Vintage stone vendors often rely on other distinguishing elements when tracking provenance, such as obvious old mine and old European cuts, to determine whether the stone should be considered ethical. These nebulous identifiers are why today’s diamond companies are so committed to developing an irrefutable tracking system for stones.
Buying with Blockchain
Blockchain has been in the news a lot recently because of its use in cryptocurrency, but even if cryptocurrency ends up being a bust, blockchain is still the best way to track diamond provenance and eliminate conflict diamonds from the sales chain. At its core, the technology is nothing more than a decentralized ledger that can record transactions in any industry and is minimally vulnerable to any kind of hacking or manipulation due to its complexity. It makes provenance of new diamonds undeniable.
Big data is already at the heart of today’s jewelry industry, improving sales efficiency through analytics and predicting market trends, a clear sign that the industry is friendly to data-driven innovation. And as a global industry, they have the communications technology to make blockchain tracking a success.
Leaders in Innovation
Several diamond-industry leaders have already adopted blockchain as a central tool of their diamond tracking system, and they’re demonstrating to others in the field the extraordinary potential of the technology. De Beers, for example, recently began using blockchain to track every diamond transaction stemming from war-torn regions. The system prevents fraudulent transactions and document falsification, with the hope of regaining the public’s trust in the diamond industry.
De Beers isn’t alone in adopting blockchain for their diamond transactions, and there’s even a diamond-industry specific platform, Everledger, committed to the process. The Everledger system records over 40 traits of each diamond, giving each a unique identity that tracks it through the sales chain. Each time the diamond changes hands, the ledger uses those traits to produce a new entry in the blockchain.
Blockchain technology takes a lot of processing power, but it’s the technology of the future due to its ability to insure transactions of all types. If diamonds are going to make a comeback among concerned consumers, blockchain will provide the supporting infrastructure.