Blockchain’s application has been expanding over the years. It is no longer limited to its role in cryptocurrency. It rose to popularity with the rise of bitcoin but it has become a useful technology for other purposes. It has expanded to the banking sector, commerce, and even the art trade. Recently, it has entered the diamond industry.
Technology’s impact according to a diamantaire
Without necessarily mentioning blockchain, noted diamantaire Patrick Saada acknowledges how technology has been influencing the diamond industry. He noted how the digitally interconnected world at present is creating changes in the way diamonds are traded. Sales are already going digital and largely free from middlemen, thus making the pipeline more efficient.
Patrick Saada has more than 17 years of experience in the diamond industry. He started as a rough diamond trader for a company in Belgium and later became a company director (of the same Belgium-based company). He eventually became vice-chairman for one of the largest diamond mining and exploration companies in Africa before deciding to establish his own company engaged in the sourcing and distribution of rough diamonds.
How blockchain is used in the diamond industry
Blockchain is a technology that entails the collection and recording of information in such a way that is virtually impossible to tamper with. This makes it a great tool for authentication. It prevents the unauthorized modification of information, which means counterfeiting and corruption become unlikely.
Authenticity is vital to the luxury goods market, diamonds included. Through blockchain technology, the genuineness of diamonds and other luxury products can be ascertained. However, the current focus on the use of blockchain is not simply about ensuring the authenticity of diamonds in the market. It is more about ensuring the standard of “conflict-free” diamonds.
Conflict-free diamonds are diamonds that are deemed to be not associated with rebel financing or the abuse of workers. These are diamonds that were mined, cut, and manufactured without being tied to human rights violations and rebel or terrorist activity. Of note, some diamonds are being sold in the black market by dubious groups to raise funds used in terror activities.
By using blockchain to authenticate diamonds, it becomes easier to identify diamonds that are considered conflict-free, thereby preventing the diamond industry from becoming indirectly involved in the financing of criminal and rights-abusive actions. Blockchain makes it possible to identify the origin of the diamonds being traded so conscientious companies can refuse these diamonds. Likewise, it helps the campaign of shaming and holding accountable those who engage in the use of non-conflict-free diamonds.
Blockchain is a very useful technology. Consumers may not find direct benefits from the way it is currently being applied in the diamond industry, but it is bound to become more prominently used as the technology progresses and as it gains more widespread adoption in the diamond industry.