Even the Jewelry Industry Needs Blockchain Technology
A distributed ledger may be used to trace diamonds, gold and more.
The jewelry industry has long since been associated with luxury, and for some, wealth preservation. The intrinsic value of precious stones along with gold or other rare metals makes it wearable concentrated wealth that mostly the privileged have used in excess.
A pressing problem that will never completely be resolved is verifying the legitimacy of jewelry. With gold-plated tungsten and cubic zirconia being things, buyers could be overpaying for what they believe to be pure, rare minerals. Filtering out blood diamonds from the legitimate diamond trade is also a persisting issue, even today.
There have been many jewelry giants that have adopted blockchain technology for both verification and supply chain needs. Of course, there are still technical hurdles that need to be ironed out in terms of security and functionality for end-users.
Tamper-Proof Digital Records
Whether it is digital or paper record-keeping, there is always corruption or human error that stifles its legitimacy. When records are made permanently from the start, there is no tampering after the fact nor will anyone who attempts to sabotage them be able to cover their tracks. This makes a genuine diamond even more concrete, adding to its value.
For example, if I wanted to sell my diamond ring online, I wouldn’t be able to prove it’s authenticity to the buyer with just a few photos. If the ring happened to be registered within a public ledger, all of the proof and transaction histories would be readily available. This would assume that some sort of mass tagging and tracking system were to be put in place on a grand scale.
One relevant project is Tracr, which provides digital records for the diamond industry via the blockchain. The idea is to make sure that every diamond traded and used for jewelry-making is accounted for and meets regulation standards. This would help keep blood diamonds out and would be viable long-term since records are permanent.
Blockchain and the Supply Chain
A supply chain is involved within multiple facets of the industry, from capital flow, material sourcing, manufacturing, and delivery. Supply chain management is a huge industry in large, developed countries and often require high-paid manpower to work on its efficiency. Software is always being tweaked to help large companies save money and reduce human error, but it has yet to work out all the kinks.
Since the jewelry industry involves gem sourcing, metals sourcing, labor, transportation, and legal compliance, this is yet another viable use case for blockchain supply management. It may also help expand the distribution network of a jewelry company and efficiently scale one’s business.
With human error out of the way with paperless, trustless records, this should make supply chains for the jewelry industry flow smoother. It also adds a sense of trust, considering that there are open records for clients to access, and may spill over to other areas of business.
Due to fast transaction speeds, having an integral blockchain should speed up administration, at least in theory. Transactions can be made without the need for middlemen or transaction fees and are made nearly instantly. If audits are needed, a quick look at the blockchain should be the end of most investigations.
In today’s market, only professional jewelers can really sort out fake diamonds or precious metals. Since consumer mistrust due to fake materials is increasing, blockchain technology may be the best option we have to increase authenticity at all levels of the market. Imagine a world where any random person may verify information on their phone with a mobile app, knowing that they can rely on the trustless nature of the blockchain when buying jewelry.