The global diamond trade is a multi-billion dollar business. However, this industry is also notorious for its conflict diamonds or “blood diamonds”. The metaphor of blood diamonds paints a vivid picture of the consequences to illegal trade. Blood diamonds have fuelled civil wars, resulted in ecological devastation, worker exploitation, child labour and human suffering.

New efforts have been made to continue fighting this issue and eventually work towards the eradication of it. The Kimberly Process is an International Body which was created to ensure trade on the basis of conflict-zone diamonds. “KP unites administrations, civil societies and industry in reducing the flow of conflict diamonds around the world”.

The Kimberly Process is a certification scheme, their original initiative was revolutionary in the sense that it created an awareness of the extreme corruption which had taken place; however, there were still many loopholes in the system. Firstly, certification did not apply to an individual stone but rather a batch. This would make it very difficult to track once the diamonds had been cut and shipped to another country.

When KP started to explore the idea of using the Blockchain, there was a great sense of hope that this would allow the initial concept to come one step closer to reality, therefore creating a record which would be tamper-proof.

The KP Chair’s office is committed to the examination of [Blockchain technology’s] benefits and is working on a potential pilot project that would use Blockchain technology to monitor KP statistics.

Blockchain, which is a decentralised ledger, has the ability to facilitate secure online transactions and record said transactions. This is exactly what is needed especially when trading a valuable commodity such as diamonds. Although Bitcoin was initially perceived as a method to make questionable transactions, the underlying technology can now be used to prevent illegal activity in the diamond supply chain.

Everledger is a blockchain based start up and is a digital ledger that trades and protects assets. They have already been involved in certification and authentication using Blockchain technology. In the diamond business, authenticity is key and can protect against any frauds. According to the founder, Leanne Kemp

The laboratory houses inspect the stone, they effectively digitize each of those diamonds… All of the angles and the cuts and the pavilions and all of the crown. And we take all of that, as well as the serial number, as well as the four Cs, and we put all that into the Blockchain,

Apart from being able to spot any diamonds that have come from conflict zones, Everledger is also able to winnow out any synthetic diamonds and could limit fencing and insurance frauds. Everledger has so far digitised about one million diamonds and has entered partnerships with the likes of Barclays.

Authentication Beyond Gems

This relatively small team of 20 people now sets its sites on other sectors where counterfeit can be a problem. For example, the company hopes to expand their offering to the fine wines sector. They will create a digital thumbprint for the wine using important information that is contained in the cork. Kemp sees the eventual use of computer vision algorithms which could help identify when counterfeiting is occurring.

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Posted by Editorial Team

Editors at large. Posting the latest news, reviews and analysis to hit the blockchain.