The diamond trade meets the 21st century
First, a brief introduction to blockchain and the diamond industry. A blockchain is simply a digital record that documents the journey of a diamond as it moves from source to destination.
The moment a record, or block, is entered into the chain, the blockchain is automatically replicated on computers around the world. That means it can’t be modified, forged or tampered with in any way – guaranteeing transparency and accuracy.
So how will blockchain improve the diamond trade?
Well, right now the best guarantee we have against unethical practice is the Kimberley Process (KP). Underpinned by a UN mandate, the KP has significantly cut down the global production of conflict diamonds. BUT. The Process is dependent on government entities, which do not necessarily guarantee honesty. And the paperwork comes in the form of a simple printed document that is far from impossible to forge.
Blockchain will be light years ahead, recording every part of a diamond’s journey from the mine onwards. Here’s an example of how it works.
Step 1 – Mine
As soon as a rough diamond is dug up, the miner registers it in the system. That will usually consist of 3D images, dimensions, even a short description of the person entering the information. This data provides the rough diamond with an utterly unique identity.
Step 2 – Manufacture
The rough stone then goes to India to be cut, polished and transformed into diamonds as we know them. But first, the cutter can check the blockchain to make sure the rough stone is the original one. Once finished, they will register the finished diamonds on the blockchain, maintaining the link to the original rough.
Step 3 – Grading
Next, the cut and polished diamonds are sent to a laboratory for examination. The laboratory prepares a grading report detailing the physical characteristics of the diamond, then inscribes the finished diamonds with their report number. This information is also recorded on the blockchain before the diamonds are returned to the manufacturer.
Step 4 – Setting
The manufacturer then sells the diamonds to a jeweller. Once set in jewellery and sold, they can finally be registered by the end customer. In other words, you. In this way, every step of the diamond’s journey from mine to Montluc can be verified. Those at every step must take full responsibility as they are unable to change or erase their role.
Courtesy of Everledger
So why isn’t Montluc using Blockchain diamonds?
“It is quite simply down to a lack of availability. Some Blockchain diamonds are coming out of Russia, but they are unfortunately not Montluc-grade quality. But that’s all about to change. De Beers is now in the process of rolling out its Tracr system, while Everledger is rapidly expanding its presence in the diamond supply chain. We will be part of both programmes.
In short, Montluc is ready to move. The technology is there. So now it’s just a matter of waiting for it to be fully adopted by the diamond supply chain. We expect to start using blockchain diamonds by the end of the year in a limited way at first, but then dialling up as availability increases. You can rest assured that we intend to do everything we can to work as ethically as possible.”
Patrick Rosenwald, CEO