Diamonds are often gifted to represent love, commitment and happy new beginnings. But unfortunately, in many countries they are more of a curse than a blessing. The precious stone industry has long been beset by blood diamonds – diamonds mined in war zones and sold to fund illegal military activity, particularly in Africa. What’s more, they are often mined using forced labour, and workers are regularly subjected to abuse and violence.
The issue of blood diamonds came to a head in the late 90s, and by 2003 the Kimberley Process was established by the UN to prevent these gemstones from entering mainstream markets. This is achieved by tracking diamonds from the mine to the market and regulating the policing around their export, manufacture and sale, with 82 signatories to the process in total.
While it has undeniably helped stem the flow of blood diamonds into mainstream markets, the Kimberley Process has a number of notable flaws and certainly hasn’t eradicated the issue altogether. But in recent years, hope has emerged that this could one day be the case, and it’s all thanks to blockchain technology.
What is blockchain technology?
Blockchain is a type of digital technology allowing the dissemination of data that’s difficult to alter. A blockchain operates as a time-stamped collection of data records (blocks) overseen by a group of computers, not possessed by any single entity. These blocks are all secure and linked to each other through cryptography (the chain in ‘blockchain’), a series of mathematical equations (algorithms) and secret keys that encrypt the data. This chain is unalterable, making it an extremely secure way of transferring and storing information. Furthermore, as blockchains aren’t centrally-owned, the data it harbours is available for anyone to view, and much more difficult to infiltrate as a result.
How is the diamond industry using blockchain?
Tracing diamonds throughout the supply chain is normally extremely hard. The gemstones are typically mined across Africa and in countries like Russia and Australia, cut in nations such as India, China and the US, before being transported to where they’re sold. Consequently, they pass through numerous parties before ending up with consumers. What’s more, details of a diamond’s provenance are traditionally documented on paper or PDFs, both of which are easy to forge. This makes it hard to tell if a gemstone truly originates from where it’s purported to have come from, or whether it’s even a genuine diamond.
As data kept in a blockchain cannot be altered, the technology enables a diamond’s entire journey to be accurately documented, while as a public record it is completely transparent too. As such, it’s no surprise that numerous companies have begun utilizing blockchains in recent times.
One of these is De Beers. The former monopoly announced it was launching its own blockchain platform called Tracr in 2018. Powered by Ethereum software, Tracr can be used to scan diamonds at every stage of the production and distribution process. Each one is given a Global Diamond ID, a digital record displaying characteristics such as its carat, clarity and colour. This enables companies to establish a diamond’s authenticity and then share this information with customers so that they know they aren’t buying blood diamonds.
Meanwhile, London-based jeweler Taylor & Hart uses the Everledger blockchain platform to track its own supply chain. The brand notes that this system eliminates the need for paper-based reporting with smart digital contracts used instead, which is not only more sustainable but removes the risk of tampering entirely.
Could blockchain really end the blood diamond trade?
Blockchain technology is evidently a very effective means of reducing forgery and authenticating a gemstone’s provenance throughout its journey. It can prevent blood diamonds from entering the supply chain in the first place, and any that do will immediately be flagged. If sellers of such diamonds know that they won’t get away with such practices as easily as before, it could dissuade them from making an attempt.
That said, we should note that blockchain technology is unlikely to be a silver bullet for ending the blood diamond trade. Unfortunately, it’s nigh-on impossible to eradicate fraud entirely, and black market diamonds will probably always exist. While blockchain can only lead to progression if those in the diamond industry actually use it. Although many of the sector’s biggest companies are already doing so, lots of smaller brands are much less likely to have the money to harness the technology, nor the expertise. Even so, blockchain can certainly improve the way diamond companies do things and help debilitate the blood diamond trade at the very least.