Diamonds on the Blockchain
More than 60 years ago The Sunday Times published a story about diamond smuggling in Sierra Leone. Surely, you know about that story, my smart friends. Don’t you? What a shame. Then let me tell you that the story about diamond smuggling that inspired Ian Fleming (don’t tell me you don’t know who THIS man is) to write a non-fiction book named The Diamond Smugglers (1957) and a fiction-book Diamonds are Forever, a novel from the James Bond Series. The book was turned into a movie in 1971 to become the 7th Bond film. The movie was sponsored by De Beers (the biggest diamond producer in the world), who insisted that Sean Connery should return as James Bond. He did, and made a nice movie that was filmed in Amsterdam. Beautiful city, beautiful girls, beautiful gems. Intricate plot. Do watch it, if you haven’t yet. There is another famous novel that comes to my mind, The Moonstone by Wilkie Collins. I confess I have not read it myself. But once, when I was young, I gave this book as a present to my girlfriend, and she told me that the Moonstone is not actually a moonstone (semi-precious moonstone gem), but the famous diamond that gained its name from the association with the Hindu god of the moon: Chandra. It was said to be protected by Indian gods but was stolen by a British officer. The stone is said to bring a lot of turmoil and unhappiness to anyone who owns it. Nice book, nice plot, nice hard cover. Pity, my girl-friend’s spaniel ate it. The girl and I parted, many, many years ago. Shame, there was a lot of romance in our relationship. Speaking of romance (I am a bit sentimental today), diamonds have always conjured feelings of romance and secrecy. So many books have been written about diamond smugglers and the diamond black market. But now it is gone! All gone! Because bloody technologies make it possible to track diamonds from miners to jewelers and people know the whole pedigree of particular gems when they buy them! For example, De Beers, whose ad slogan was used as a title for the James Bond movie I mentioned earlier, can now track diamonds from the mining stage until the product reaches a retail store. In May De Beers announced that it had managed to track 100 high-value diamonds from the mine to the retailer using blockchain technology. No way for thieves and smugglers to interfere! To track diamonds, De Beers uses blockchain technology. It has developed Tracr platform that works on the Ethereum blockchain. Tracr assigns a unique “Global Diamond ID” which records individual diamond characteristics such as carat, clarity, and color. Tracr verifies the data at each milestone of the diamond’s movement from the mine to the retailer. The new platform was developed by De Beers together with five other diamond manufacturers: Diacore, Diarough, KGK Group, Rosy Blue NV, and Venus Jewel. By the end of the year De Beers intends to make Tracr open to the whole diamond industry. Tracr can keep a track all diamonds between 5 and 10.8 carats, and, for example, India, one of the leading diamond producers in the world, estimates that this could bring around 60% of its informal diamond industry on one platform. Tracr is not the first attempt of the diamond industry to use the blockchain technology to enhance consumer confidence and prove that its production is non-conflict (which is especially important for the diamonds produced in the war zone that could be traded illicitly). For example, De Beers operates mines in Botswana, Namibia, and South Africa. In April, leaders in the diamond and precious metals industries partnered with IBM to develop the Trust Chain initiative, a blockchain platform which will purportedly provide more transparency in the industry. Based on the IBM Blockchain Platform and the Hyperledger Project, the initiative is designed to track and authenticate diamonds and precious metals from their place of origin to their retail location. No place for smuggling diamonds, no place for romance any more. Unless some talented novelist incorporates hackers and cryptographers in the story. And I, old Curmudgeon, like a good old romance. It is like good old whisky. Maybe even better.