NATIONAL JEWELER 47 At its most basic level, blockchain is simply a new type of database. Unlike “traditional” databases, blockchain is decentralized so instead of being controlled by a single person or entity, data is stored on thousands of computers, known as nodes. Each node has access to the same data, which is updated across all nodes whenever a new transaction or series of transactions (a block) is recorded. For all practical purposes, every entry on the ledger is immutable, which means that once a transaction has been recorded, it cannot be changed or undone. Gideon Greenspan, CEO of blockchain technology platform Mul- tiChain, explains that there are two key differences between the “old” and “new” types of databases. The first is that there has been a reduc- tion in the number of people or companies (intermediaries) that stand between producers of goods and consumers of goods, a process called disintermediation. The second difference is greater transparency. These two factors enable multiple parties who maybe don’t know—or fully trust—each other, to share a single database without needing anyone to oversee it. DIAMONDS AND THE BLOCKCHAIN The diamond and jewelry industry has embraced the blockchain concept wholeheartedly, with a host of initiatives springing up at all points along the supply chain. The Gemological Institute of America and Chow Tai Fook are using blockchain to bring diamond grading reports to consumers; diamond miner Lucara acquired Clara Diamond Solutions, which matches rough diamond production with polished manufacturing demand and uses blockchain technology to track diamonds as they move through the supply chain; and TrustChain, developed by a con- sortium of metal suppliers, refiners, manufacturers and a retailer all under the Berkshire Hathaway umbrella, is using IBM block- chain tools to track both metals and diamonds as they move from mine to market. Two of the most visible initia- tives to emerge so far are Everledger and De Beers’ Tracr platform, which are both being built to track diamonds through the supply chain. Everledger, a London-based start-up working to reduce risk and fraud for bankers, insurers and open marketplaces, has been tracking diamonds since 2015 and has added more than 2 million diamonds sized 0.3 carats and above to its system. Since 2017, the company has been using the “Diamond Time-Lapse” (DPL) initiative, a tool originally developed by Mumbai-head- quartered Dharmanandan Diamonds, to keep tabs on diamonds. The DPL, which is open to the entire industry, tracks real-time data about a diamond’s journey from mine to retail and records informa- tion about each diamond’s origin, cutting and polishing, certification and transactions. While it might not have the big-number bragging rights of Everledger at this point, the Tracr pilot is making plenty of noise. Since it began, more than $100 million worth of diamonds have been registered on the platform. Diamonds ranging in size from 5-10.8 carats are given a Global ID, which records key attributes such as carat, color and clarity, and all transactions involving the diamond. The Tracr system is being trialed in collaboration with some of the industry’s largest manufacturers—Venus Jewel, Diacore, Diarough, KGK Group and Rosy Blue NV—as well as one very big retailer, Signet Jewelers. While no exact date has yet been given for a wider launch—the company is still bringing in key industry players and trialing the platform—De Beers expects to start integrating industry participants outside the pilot by the end of the year. What is clear is that De Beers is designing Tracr for the industry to run independently, rather than De Beers overseeing it. “[Tracr] will only maximize its poten- tial if it is a platform developed by the industry on the behalf of the industry,” explains Feriel Zerouki, senior vice president of International Relations and Ethical Initiatives at De Beers Group. It will, she says, provide, “a single source of truth for the diamond industry.” IN) I n the diamond industry these days, all bets are on the burgeoning blockchain technology. While blockchain has many applications, its primary use in the diamond and jewelry business is to create a chain of custody, one that can, theoretically, guarantee consumers the diamond in their hands is mined, untreated and conflict free. Blockchain initially was created as the electronic system for backing Bitcoin, the first cryptocurrency, which was founded by a person, or people, using the name Satoshi Nakamoto in 2009. Today, a broad range of industries from retail to shipping are using blockchain to keep tabs on products, boost consumer confidence, increase efficiency and introduce unparalleled levels of transparency. The diamond industry is hoping to do the same. The blockchain will provide a “single source of truth for the diamond industry,” says De Beers’ Feriel Zerouki.