De Beers is an international corporation that specializes in diamond exploration, diamond mining, diamond retail, diamond trading and industrial diamond manufacturing sectors.
The company said that it has tracked 100 high-value diamonds from miner to retailer using blockchain technology.
This is the first effort of its kind that aims to clear the supply chain from imposters and conflict minerals.
What's more, as the world's largest diamond producer by the value of its gems, De Beers' effort has made it able to verify the authenticity of diamonds, ensuring that the stones aren't from conflict zones where gems may be used to finance violence (conflict diamonds, or blood diamonds).
"An immutable and secure digital trail was created for a selection of rough diamonds mined by De Beers as they moved from the mine to cutter and polisher, then through to a jeweler," said De Beers in a statement.
Key challenges faced by supply chains, include:
- Transparency: low visibility and control of origin drives uncertainty about ethics and authenticity of products.
- Privacy: sensitive data and prices should remain confidential.
- Traceability: no reliable and permanent records of assets, as products move along the value chain.
- Compliance: the high costs of compliance and data management, caused by the complex, manual, and inconsistent processes.
- Trust: due to the lack of transparency and traceability, there is limited trust among transacting parties.
To address these issues, De Beers worked with five diamond manufacturers: Diacore, Diarough, KGK Group, Rosy Blue NV and Venus Jewel, to create a blockchain technology called Tracr.
At a glance, Tracr is just like another platform that tracks diamonds as they move through the value chain, from mine to store counter. It doesn’t seem all that revolutionary, as such programs already exist. However, most of those programs are based on company record-keeping. Tracr on the other hand, hopes to use scientific data to uniquely identify each diamond by developing what it calls a Global Diamond ID.
This would allow the parties to easily pick out 200 different characteristics that exist from each stone. Using those characteristics, the parties can use them to create a unique signature.
Initially, the effort was focusing on larger diamonds. With the shared database used in blockchain, the transaction was maintained by a network of computers on the internet. The technology should help the companies in:
- Auditability.
- Tamper-proof records.
- Security.
- Smart contracts.
- Democratic collaboration.
- Data authenticity.
The parties involved, include: banks, producers, sightholders, diamond offices, traders, graders, logistics, retailers and Government Kimberley Process.
"The Tracr project team has demonstrated that it can successfully track a diamond through the value chain, providing asset-traceability assurance in a way that was not possible before,” said De Beers chief executive Bruce Cleaver.