De Beers Piloting Blockchain Platform for Diamonds

New York--Blockchain is a technology that’s poised to transform industries in the coming years, and De Beers wants diamonds to be one of them.

Last week, the diamond miner and marketer announced it has launched a pilot blockchain program for diamonds in partnership with BCG Digital Ventures, a subsidiary of Boston Consulting Group that’s investing heavily in blockchain.

Best known as the technology behind bitcoin, blockchain is a secure digital ledger that is decentralized, meaning it exists across multiple computers and servers and is not owned by any one user or organization.

For the diamond industry, De Beers’s David Prager said it will be used to register each interaction with a stone—like when it is cut at factory or graded at a lab—that then becomes part of the “block” of information about that particular diamond as it passes through the supply chain.

Each block must be validated by the blockchain community before it is added to the digital ledger.

When “chained” together, these individual blocks will form a digital record for each diamond.

Though it is being developed by De Beers, Prager said the diamond blockchain will be accessible by all industry participants, but will not include lab-grown diamonds.

“This is a diamond blockchain to record a diamond’s journey as it passes through the full value chain,” he said. “It is not for other products, whether they be lab-grown, precious metals or simulants. This means that the diamond blockchain will be able to provide the industry and consumers with clear and unambiguous assurance that their diamond is natural.”

It will be governed by an independent, nonprofit organization, the details of which are still being worked out.

A key focus of the pilot program is making the blockchain compatible for a range of operating systems for computers and phones.

When asked which companies will shoulder the extra cost blockchain will bring to the supply pipeline, Prager said De Beers is making the initial investment in blockchain because it believes it’s important for the diamond industry and that, ultimately, the efficiencies it will create in the supply chain will reduce the cost of doing business for many users.

 Having a Blockchain for diamonds would serve several purposes that De Beers and other players undoubtedly see as critical to the industry at this juncture.

First, keeping track of stones from mine to market allows the people who sell them to comfortably say this diamond is what it’s being presented as—for example mined, not lab-grown—and comes from an area of the world currently free of conflict.