De Beers, the diamond unit of Anglo American, is harnessing blockchain technology to keep track of every movement of a gem. Set to launch later this year, the new industry-wide blockchain aims to document the movement of diamonds and other gems from the time they are dug up from the ground.
Although cryptocurrency is the most prominent application of blockchain technology at this point, it is but one of many. Increasingly, businesses of all types have looked to the emerging technology as a means of upgrading their models, adding security and documenting transactions. (See also: Is Apple Planning to Use Blockchain?)
According to Reuters, one of the primary goals of this new application of blockchain technology is to authenticate diamond transactions. De Beers is the largest diamond producer in the world by value, and it has a long history of working toward authenticating diamonds as a way of insuring that they do not come from conflict zones or other sources of violence.
Maintaining accurate and detailed histories of individual stones is essential to De Beers' reputation among its customers. As a result, it has widely shared technology used to authenticate diamonds with other industry players in the past.
Blockchain can be a useful tool in this process, according to De Beers CEO Bruce Cleaver. "It's a huge public ledger as immutable as anything invented. It's a much more un-hackable system than anything on a single server," he explained.
Blockchain Could Supplement Existing Methods
For the time being, it doesn't appear that De Beers will give up on its existing methods of tracking diamond transactions and authenticating individual stones. Rather, blockchain technology may complement existing tools. Regardless, the goal is to find a secure way of tracking diamonds and a sure-fire guarantee that individual diamonds are conflict-free.
De Beers plans to open its ledger to the industry in order to assist in the broader monitoring of diamonds worldwide. "It has the ability to be very significant for the industry," Cleaver suggested, adding that blockchain could help to make the mining supply chain more efficient. (See also: What Is Blockchain and Why Should I Care?)
For De Beers, the project has been several months in the making: the company began its pilot project this month. "It's a bold step going public with a pilot, but we're going public because we're interested in the entire industry participating," Cleaver explained. The participants in the pilot were not disclosed.
In a related application of blockchain technology, startup Everledger has indicated that it has used blockchain to track diamonds since 2015. The tool could also be expanded to aid in insuring the ethical origins of other minerals as well.
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