Blockchain puts sparkle back in diamonds
New system designed to track and authenticate stones all the way from mine to retailer
De Beers, Africa’ s biggest diamond mining firm, has unveiled the Tracr blockchain platform at scale for its diamond production.
Tracr is the only distributed blockchain diamond tracking system, designed to track and authenticate the precious stones at all stages, from mine to retailer.
“With more end clients wanting to know the source of the products they buy, the deep meaning associated with a diamond purchase requires a technological step-change to meet their expectations,” De Beers announced.
“The introduction of TracrTM at scale delivers immutable information on the source of De Beers’ diamonds across the value chain and makes source assurance for 100% of De Beers’ production possible.”
The Tracr platform combines distributed ledger technology with advanced data security and privacy, ensuring that participants control the use of and access to their own data.
Each participant on Tracr has their own distributed version of the platform, meaning that their data can only be shared with their permission, and only they choose who can access their information.
According to De Beers, the advanced privacy technologies used by Tracr reinforce data security on the platform.
“The immutable nature of each transaction on the platform ensures that the data cannot be tampered with when the diamond progresses through the value chain,” it said.
The deployment of Tracr is a major boost in the efforts to weed out Africa’s blood diamonds out of the global supply market.
In 2018, a consortium of leading diamond and jewellery companies from around the world also announced a unique blockchain collaboration called TrustChain.
For decades, states like Sierra Leone, Liberia, Angola and the Democratic Republic of the Congo were beset with the terrible paradox of having vast mineral wealth and simultaneously, dire poverty, due to conflict over those minerals.
Armed groups often fought to control mineral interests and used forced labour in the mines.
The film Blood Diamond brought this to the attention of the world, leading to a backlash from consumers who demanded guarantees that they were buying conflict-free diamonds.
Blockchain technology stores every transaction related to the diamond as a chain of blocks of information, guaranteeing full transparency to the process.
De Beers’ move is expected to force other industry players to adopt better diamond mining and tracking practices, including leading companies such as Alrosa, Debswana Diamond, Rio Tinto Diamonds and Dominion Diamond, as the industry thrives on market perceptions and sentiment.
According to Statista, as of 2020, the Russian diamond mining conglomerate Alrosa had the largest market share of any diamond mining company in the world, with about 27.5%, followed by De Beers which accounted for 23%.
About 142-million carats of diamonds were estimated to have been produced from mines worldwide in 2019.
Major producing countries include Russia, Australia, Canada, the Democratic Republic of the Congo, Botswana and SA, while worldwide reserves are estimated to be about 1.2-billion carats, with Russia having the largest reserves, estimated at about 650-million carats.
According to IBM, the jewellery industry has traditionally depended on certificates to prove that a gem is not counterfeit or sourced from a conflict zone.
But that tracking process has been heavily manual, paper-based, and prone to inaccuracies. “That’s where blockchain can make a difference — by creating a permanent, fully traceable record that can’t be altered,” IBM said. “The ledger is transparent and distributed across multiple computers. “This creates an immutable audit trail for traded stones.” Wider rollout of blockchain certification could help end the potential for diamond-funded conflicts, leading to consumer confidence in the industry and more investment into diamond mining across Africa. —