In the diamond industry, there is mystical importance of blockchain technology. This advanced tool could identify the origin of any product. You can also trace its source to the destination path. The historical origin of the diamond determines its value in the market. Tracr and many other organizations are built for tracing the history of diamonds. It is also responsible for answering the origin of that diamond—also the process of how it reached the present location. Blockchain technology is capable of determining the reputation of the diamond industry in the vision of the customers. Hence the supply chain of any diamond determines its luxurious value in the market.
Everledger developed this blockchain technology. They want to represent the clear and transparent value of the diamond. With blockchain, every diamond is assigned a specific Global Diamond ID. This digital ID includes several features like clarity, carat, and color. It helps stakeholders of blockchain technology gather and analyze this type of data and several other pieces of information. This is a very important and beneficial need for the diamond industry.
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What is Blockchain Technology?
Blockchain technology is a system of unique databases. This digital ledger can store data as an encrypted block of information—these blocks stores data in a chained structure. The data stored in blockchain technology does not provide anyone to access edit. Also hack or performing other types of exploitation is also not allowed. Each block in a blockchain stores information in chronological order. Blockchain technology is a decentralized type of database. In this, the entered data is uneditable for other users to avoid exploitations. The entered information is strictly stored and viewable to the users.
Blockchain technology is a very secure technique. It uses the digital signature for every authentication process. Each and every transaction in blockchain technology requires authentication using the owner's digital signature. Blockchain technology includes a system of several other technologies. They all work together to provide an automated and systematic solution to the users. It has cryptography keys as public as well as private keys for security. Peer-to-peer networking of data stored in the database. Also, an advanced computing technique for storing. Recoding of every transaction to the database is through networks. We can say that blockchain technology is a kind of distributed ledger technology. It stores every transaction along with an irreversible cryptographic key signature. This cryptographic key is also known as a hash.
How do you find the Diamond Origin with Blockchain Technology?
Blockchain technology is the most valuable tool. It is beneficial for determining the origin of the diamond. It also traces its journey from mine to the manufacturer. Determining the exact market value of diamonds is by going through their history. Every mined diamond includes a unique digital ID. Blockchain stores this unique digital ID and is accessible to every participant in the diamond industry. Blockchain technology records the entire journey of the mined diamond. This makes the traceability of diamond origin very efficient. Blockchain technology stores every transaction related to the diamond as a chain of blocks of information and provides full transparency to the process. Blockchain technology can authenticate the source of the diamond. This may increase the value of the diamond to a greater extent.
Synthetic diamonds are also prepared in labs using modern technology. They match the chemical and quality composition same as that of natural diamonds. Hence it is important to distinguish between them to authenticate the actual value of any natural diamond. We can put in place blockchain technology for this purpose. It is very effective in tracing the originality of diamonds. It uses several techniques and tools as well as the information provided. Information is in the chain of blocks stored in the ledger database.
Read more: A Complete Guide to Diamond Inclusions
How different companies use Blockchain Technology for diamonds?
In 2015, an organization known as Everledger emerged. Everledger aimed to bring transparency to the diamond industry. Eveledger, along with IBM, developed a blockchain using some advanced open-source software tools. An efficient interface software tools were also developed. It creates an interface for cutting, modeling, and scanning the diamond manufacturing process. Precise instruments were also installed. They are responsible for generating and storing the obtained data into blockchain technology.
Various companies in the diamond industry use several emerging technologies to assure the traceability and authenticity of the diamond. Technologies like artificial intelligence, the internet of things, and blockchains are used. Advanced security and privacy are provided to the customer. Connecting the supply chain of the diamond industry is considered very profitable for the company. Several other companies inspired by this idea stepped into this initiative and implemented it throughout the blockchain. Companies like Tracr, De Beers, GIA are an integral part of blockchain by providing the origin of the diamond. Under the Manufacturing process, companies like Venus Jewel, Rosy Blue, Finestar Diamonds, KGK Diamonds, Hari Krishna Exports, Dharmanandan Diamonds, and several others efficiently use blockchain technology for diamonds. Under Retails Signet Jewelers & Chow Tai Fook were the initial chain stores to implement blockchain. They are successful in bringing transparency to the diamond industry. Blockchains are used in importing, exporting, and producing processes by diamond companies. Companies use blockchain technology to describe the value of diamonds from their discovery to retail. So, we can say that companies can use blockchain technology for the diamond industry effectively and maximize their transparency.
Can Blockchain Technologies will be a game-changer for the diamond industry?
Several companies implemented this technology to track the diamond supply chain like De Beers, IBM, Tracr, etc. The company's motive is "to provide immutable, transparent and authentic ledger. This ledger could track the origin of any diamond in the diamond industry", CEO Bruce Cleaver – De Beers. Blockchain technology provides a decentralized database. This decentralized database includes a backup using several other technological tools. This technology guarantees that it is impossible to tamper with the stored data. The industry is still figuring out the various implication of this technology. But the initiative is very clear.
There are several benefits of implementing blockchain technology in the diamond business. It provides transparency to the supply chain. Through which customers can authenticate the actual value of a diamond. This will help in distinguishing them between real or fake ones. The professionals of the diamond industry can also use this technology, As for the analysis of their supply chain techniques and procedures. IBM collaborating with several other companies, provided this blockchain technology for authenticating diamonds in the diamond industry.
Along with this, blockchain technology provides advanced and efficient, cost-saving security. It also provides dispute settlement, smart contracts, and real-time tracking of any product. The main focus of any company in the diamond industry is to use blockchain technology to maximize their business. We can say that blockchain technology will be a real game-changer in the diamond industry.
You can also read: How online technology has disrupted the retail jewelry industry?