Diamonds and Traceability
By Raffaella Aghemo on The Capital
The transparency, traceability, and immutability of data, recorded on distributed protocols, using blockchain technology, is touching a number of sectors but is “flooding”, in an increasingly conspicuous way, the luxury sector. High-level consumers are increasingly looking for a safe and certified purchase that not only reassures them about the value of the object obtained, but also makes them “credible” when and if they want to sell it.
It is no coincidence that for a year now, in the diamond sector, work has been underway to create a “certification” system which, if it is based mainly on the new technology of the moment, does not necessarily end with it.
Among the first to move towards this development plan, the American jewellery house Tiffany & Co., which with the Diamond Source Initiative project, wants to make the geographical origin of its diamonds transparent, to guarantee 100% traceability of the diamond supply chain, through coded certificates, the Tiffany Diamond Certificates, in which the stone’s specifications and provenance will be recorded.
Alessandro Bogliolo, CEO of the company, explained how the system is based on “our proprietary and secure database that links the serial number of the diamond to its provenance and craftsmanship”.
Before them, about a year earlier, January 2018, the South African giant DeBeers collaborated with the Tracr pilot project, based on blockchain, for a profitable and effective traceability and authenticity of the diamond, also making it easier to circumscribe conflict zones, from which the so-called “blood diamonds”, blood diamonds, defined in this way because they are derived from the exploitation of labour in war zones, come from. Thanks to a distributed public digital register, it will be possible to preserve forever, in a safe and accessible way, all information and transactions.
Long before the big names, the entrepreneur Leanne Kemp, with her startup Everledger, created a hybrid blockchain platform, which, through an in-depth analysis of a series of factors, such as color and sharpness, created a digital identity for each diamond, a digital certificate that documents the ownership of the jewel and its life, from the mine to the jeweler’s window.
The expansion of the phenomenon, development, and research to guarantee the consumer, has also involved realities that are extending their range of action to the Asian market and in particular to China, such as the Chow Tai Fook Jewellery Group (in Hong Kong, ZhongAn Technology, claims to have already “filed” seven hundred and sixty thousand gems thanks to the blockchain).
Another round, another race: a startup, the Bit Carat, with the help of experts from the National University of Russian Science and Technology, will protect natural diamonds, which are among the most precious assets commercially available, avoiding scams. The diamond market is not only about natural gems, but also about synthetic diamonds, which are the result of a laborious energy work, which do not take billions of years to form, which have physical and molecular characteristics equal to natural ones, but which have a value forty percent lower. Blockchain technology could make a difference, creating a unique ID of natural diamond, compared to synthetic diamonds. It would also help a market, still at the mercy of scams (such as the recent one involving names like Vasco Rossi), guaranteeing a unique, safe and reliable certificate.
After Botswana and Russia, Canada, where, after Botswana and Russia, enters the podium of the diamond-producing countries, where the abundance of gems is accompanied by the positive figure of a “conflict-free” product, as it is extracted in an economically stable and productive country, therefore more attractive also for the market.
Consulcesi Group, through the Consulcesi Tech project, “has developed a “digital diamond identity card” with a unique counterfeit-proof code that guarantees the quality, provenance, and legality of diamonds. In this way, there will be no more doubts or fears of being defrauded because at the time of purchase each diamond will be accompanied by a digital file containing information on where it was extracted, where it was cut and what path it has taken”. The related use of blockchain and smart contract technology will guarantee a transparent purchase far from scams and deceptions.
The traceability of gems has become a priority, even in the face of objective market difficulties: in the first nine months of the year, sales of American giants fell by 11%.
As in the fashion sector, the market is putting the customer at the center of every marketing and research action, especially in the field of precious stones, the protection of the product and the purchase becomes a priority, and the help of new technologies is a guide and a stimulus in the market of tomorrow.
“Ah, what a feeling it gives you to hold a Diamond in your hand! It’s like holding a piece of the moon.” (Anna Magnani)
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Raffaella Aghemo, Lawyer
