How blockchain tracks diamonds from mine to manufacturer
Getting engaged? Blockchain may have a hand in it. The technology may not make popping the question any less nerve-wracking, but it can help couples buying a ring breathe a little easier knowing that it’s ethically sourced.
A consortium of leading diamond and jewelry companies from around the world announced a unique blockchain collaboration called TrustChain. This consortium will track and authenticate diamonds, precious metals, and jewelry at all stages of the global supply chain, from the mine to the retailer.
“Consumers should be able to see the journey their gem has gone through. Soon ring owners will be able to look up their rings [on the same blockchain],” said IBM Senior Vice President of Industry Platforms Bridget van Kralingen in an interview with Fortune.
It hasn’t always been so easy to trace the provenance of jewelry through the various steps of far-flung supply chain routes. Traditionally, the jewelry industry has 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. The ledger is transparent and distributed across multiple computers. This creates an immutable audit trail for traded stones.
TrustChain is not the first initiative to apply blockchain technology to the jewelry industry. A UK-based company called Everledger is using blockchain to authenticate and trace the origin of high-value and luxury goods, such as diamonds and wine that are authenticated by trusted players like certificate houses.
Companies across industries are embracing blockchain technology to improve their supply chains. By putting their transactions on shared ledgers, they’re tracking shipping containers, enhancing food safety, and even funding Hollywood blockbusters with greater accuracy and transparency. For automotive manufacturers, blockchain also holds a lot of promise. Blockchain can help solve visibility issues by tracking high-value goods from mines to factories. And, as with diamonds, it can discover the provenance of precious metals such as cobalt, a key ingredient in electric vehicle batteries.
Blockchain works with other technologies to spot supply chain problems before they impact the bottom line. Connected to IoT and weather data, blockchain would “provide permissioned parties in the inbound chain to the plant with an accurate and transparent end-to-end view of part location, quantity, status and other useful information,” said IBM Blockchain Leader Matthew Jones.
Globally, about $13 billion worth of rough diamonds is extracted every year, before being cut and sold in an industry worth $72 billion. With as much as 65 percent of a product’s value coming from suppliers, supply chain managers need to identify and prevent potential disruptions before they cause headaches.
By embracing blockchain, both manufacturers and consumers can make healthier and more ethical purchasing decisions.
“People do care about what they buy,” said van Kralingen. “Most consumers, especially millennials, will pay more to know.”