While Sounding Like a Gimmick, This Blockchain-Based Diamond Supply Can Help Fight Crime
TechnologyBit News Today2 min read
Everledger, a firm offering blockchain-based services for identifying diamonds, has announced a successful test of its new blockchain powered diamond supply chain system. Called Everledger Supply Chain, the service uses blockchain - the same technology that underpins cryptocurrencies like Bitcoin - to give a unique digital fingerprint to each diamond in the system. The goal is to eliminate crime and improve market transparency, by letting anyone track a diamond's full history through the blockchain.
Now, Everledger Supply Chain expands on this with a suite of services, from smart contracts to an application for shoppers that can be used to verify a diamond's origin. ## What is Everledger?
The idea for the Everledger sprang from a problem the diamond industry has struggled with for over a hundred years: the difficulty of identifying a diamond. Founder Leanne Kemp, who had previously worked in the diamond industry, noticed that each diamond was shipped with a giant invoice that would sometimes run to several pages, forcing retailers to visually assess and identify diamonds themselves. Diamond fraud was rampant.
Everledger offers a solution. With blockchain, the information about the diamond's history is permanently recorded, digitally fingerprinted, and securely stored. It's nearly impossible to alter the record, making fraud far more difficult.
Because the supply chain is so opaque, it's also hard to track the progress of a diamond through the mostly private supply chain. Everledger offers an app that allows shoppers to identify the history of the diamond they are buying. ## How does it work?
Everledger scans a diamond at the point of manufacture, giving it a unique fingerprint. That information is posted on the blockchain, and encrypted, so even a cryptographic expert would find it difficult to alter it. The blockchain stores digitized certificates of all the steps of the diamond's history, from the mine, to cutting, to sale. This includes information about prices, the conditions of labor, and environmental impact. ## What does it mean for the diamond industry?
So far, Everledger has been working with some of the largest players in the industry, including De Beers and Sightholders (a group of companies which buy rough diamonds from De Beers and resell them). These companies stand to lose a lot of credibility in the event of fraud. If the blockchain system can significantly cut down on this, it's a win for them.
They are not the only companies who might be in danger. Everledger's data will allow shoppers to more easily identify the origin of a diamond, which means that a diamond with shady conditions of manufacture will be more likely to be identified. This could push those mines to consider making the conditions of their labor more transparent, if they are to compete with the ease of the blockchain companies.
But this is only the first step. Everledger's system will be more useful as more companies adopt it. It won't eliminate fraud overnight, but it is a step in the right direction.
