The technology can improve transparency within the diamond sector. The industry has had its fair share of fraud cases. 

One diamond can have many documents due to tampering. It makes it hard to track the origin and movement from one place to another. 

Blockchain technology, at its basic premise, should be resistant to modification. It provides a secure record of transactions while improving visibility and efficiency. 

As of 2020, the blockchain solutions market brought in $4.5bn. Projections are optimistic, placing revenue generation by 2024 at $19bn. Over 60% of organisations have put aside at least $1m towards the technology. 

Our article explores how distributed ledger technology (DLT) widens the diamond market. 

Understanding Blockchain as a DLT 

The beauty of blockchain technology is the level of transparency it gives processes. Everyone within the transaction chain knows what happens at every stage. 

This is how the Distributed Ledger Technology (DLT) works. It provides the framework that underpins blockchain technology. 

A DLT comprises decentralised databases. Different participants manage the database. The blockchain allows for the recording of transactions. It uses immutable cryptographic signatures going by the name hash. Chains link each transaction block, containing a hash. 

Within the diamond supply chain, different blocks represent each stage of the journey. Right from the mine or lab, in the case of lab-grown diamonds, to the final customer. The linkages make it easy to track the progress, whether forward or backward. 

Now let's go back to the diamond business to see how all these tie in together. Establishing the diamonds' authenticity, origin, and price can be quite difficult. 

The supply chain is very complex. It starts from the mines to those who cut the diamond shape and finally the end product. You can only imagine the number of people who participate in the transactions. 

The stones will pass many hands before it reaches the end consumer. Within each party lies different interests.

Customers, for example, want to know they are not buying blood diamonds. Insurance underwriters will worry about fraud or theft. For the dealers, information needs to be secure. 

Blockchain provides an immutable way to track diamonds using tamper-proof digital ledgers. The technology provides unique thumbprints using different metadata points. It helps provide a journey or story point of origin to the end customer. But it needs a connection with every participant within the supply chain. 

• Certifying Diamond Origins with Blockchain  

Jewelry companies are using blockchain DLT to prove the authenticity of the diamonds. Customers and other stakeholders can verify information anytime they need to. 

No one within the supply chain can alter the information in any way. Customers can access the information on mobile or web devices.  

• Privileged Access to Data  

We talked about the blocks above. The information or data in each undergoes computational verification, encryption, and updating. All this happens on each participant's chain rather than in one location under the control of one entity. 

Public records containing blockchain information are visible to all the participating stakeholders. It improves transparency and reduces the chances of tampering. Only those with permission or relevant privileges can access the data. 

• Blockchain to Combat Ethical Concerns around Diamonds 

Ethical concerns around diamond mining have cast a dark shadow over the industry. Conflicts, worker exploitation, and child labor are prevalent in some areas. 

Angola, the Democratic Republic of Congo, and Sierra Leone have been in the spotlight. There are concerns about the use of diamond money to buy military arms. 

Beyond that, there is environmental concern around the mining processes. Giant diamond companies have been distancing themselves from such activities. 

The technology provides assurance of the origin of the diamonds the company sells. Tracr combines DLT and advanced data privacy and security. 

Participants have control over data access and use on their distributed platforms. They can also decide who to permit to see their information. 

• Blockchain Enhances Diamond Safety in the Supply Chain 

Diamond dealers can store unique diamond identifiers. The most significant attributes are clarity, cut, color, and carat. To this, they can attach the different prices and supporting documentation. 

With blockchain, only the parties with permission can see such information. It helps avoid duplicity due to double financing. The dealers can also track stolen stones. All they need to do is trace the diamond movements, even across borders. 

• Improved Industry Perception amongst Customers 

The transparency blockchain provides a powerful marketing tool. We are dealing with consumers who are demanding information. They also like to know that the diamond companies are addressing their concerns. 

Giving customers access to critical diamond information can create a positive perception. Indeed the reputation of the company depends on this. 

Diamond purchasing customers can trace the diamond authenticity back to the source. It provides proof that they are not purchasing fake stones. They can also know whether they are buying synthetic or lab-grown diamonds. 

Unscrupulous sellers can try to pass off natural diamonds with the lab varieties. The blockchain provides the tool to check. This helps protect the interests of the end buyers. 

Final Thoughts 

The advantages of blockchain DLT in the diamond industry are clear to see. Every participant within the blockchain has access to information. But it’s also worth noting that only authorised individuals can access this information. The technologies allow tracking of the stones from origin to the end customer. 

Greater transparency provides tons of benefits to everyone within the supply chain. Customers can authenticate diamonds, thus reducing fraud incidences. It helps make the transaction of diamonds safer and more transparent.

Finally, blockchain technology is very secure. No one can tamper with or change the information without the relevant access privileges. Blockchain in the diamond industry will also improve efficiency, thus higher profits