The revenues from the illegal trade in “Blood Diamonds,” which prolong wars in East African nations like Sierra Leone and Liberia, have given diamonds a poor reputation throughout the years. The agony the illicit diamond trade causes to populations is depicted in the 2006 Leonardo DiCaprio film Blood Diamonds.
Additionally, as technology develops, more instances of fake lab-grown diamonds receiving real diamond certification are becoming public.
Consider a case from 2021 when a 6.18ct round brilliant-cut loose stone that the Gemstone Institute of America had previously graded as a “real diamond” was discovered to be lab-grown. The International Gemstone Institute was invited to double-check the diamond, which led to the discovery of the scam.
How might blockchain technology and NFTs be used to combat diamond fraud?
Blockchain technology is already utilized by De Beers, the largest diamond firm in the world. The business debuted its Tracr platform in May 2022, which manages the manufacture and distribution of its diamonds.
The platform’s immutable transactions eliminate the risk of data modification and certification fraud.
In addition, a Bain and Company survey indicated that buyers have higher standards when buying diamond jewelry. This social consumerism takes into account production’s social and environmental effects, conflict-free supply chains, and carbon footprint.
Consumers can observe a diamond’s history before the purchase thanks to the blockchain’s recording of all information pertaining to each gem.
Non-fungible tokens may potentially be a component of a successful strategy to combat diamond certification fraud.
The 2021 lab-grown case demonstrates that diamonds can undergo many grades, and the buyer might not obtain all related data. Since the diamond is listed as an NFT on a public blockchain, the records cannot be exploited.
In an interview with Cointelegraph, Diamond Dawn’s CEO, Mike Moldawsky, said:
For both shops and consumers, having a diamond certificate as an NFT on the Ethereum blockchain can guarantee immutability, proof-of-ownership, and visibility.
AFTERTHOUGHTS
All industries will continue to adopt blockchain and NFTs, whether it’s to facilitate supply chains or product certification. One business that stands to gain significantly from the adoption of these new technology is the diamond trade, which would also help restore its damaged public image.
