After being applied in more than 20 different industries around the globe, it is no surprise that blockchain is now being used in the diamond industry. The diamond industry was and still is considered a monopoly, or lately, an oligopoly. And while diamonds are forever, so are the issues related to them, it seems.
The most famous one is known as “blood diamonds”. Blood diamonds are diamonds that are mined in an illegal manner and then sold on the black market. The “home” of blood diamonds is Africa. What makes them “bloody” is that the revenues from selling such jewels go to war and terrorist funding.
The problem has been a long-standing one. The United Nations designed the so called Kimberley Process to mitigate the situation. The Process aimed to democratize the entire chain of mining diamonds and selling them on the open market to create fairness. However, the initiative has not been working as effectively. As reported by Innovation Enterprise Channels (IEC), the major problem is that the Kimberley Process does not certify diamonds as “free of conflict”.
That issue is the major one when it comes to solving the issue with blood diamonds. The crucial element that is missing is a fully-fledged tracking system that follows the “diamond’s path” from mining to selling.
To provide such a system, the blockchain company Everledger built a specially designed blockchain ledger that registers and tracks individual diamonds. The system allows for around 40 different characteristics to be accounted for each diamond such as color, clarity and other. Everledger has been quite successful in registering diamonds and their features, since 2015 they have amassed more than one million unique jewels in their blockchain-powered system.
Another major player, De Beers, which is probably the world’s most famous diamond company, is also planning to implement blockchain for the diamond supply chain. Their platform is called Tracr, and is a more sophisticated system than Everledger’s, as reported by IEC.
Given the exclusivity of the diamond industry and the added value that can be sought if a blockchain system is applied consistently to all individual diamonds, the benefits could be huge. The issue of blood diamonds has tormented the globe for decades. Blockchain may be the ultimate solution to this problem, where countries such as Sierra Leone and the Republic of Congo have experienced unfair labor conditions and pressure from suppliers.