De Beers tracks first diamonds with blockchain, potentially limiting fraud →

The Tracr program will use blockchain technology to source and monitor diamonds throughout the supply chain.

Diamond conglomerate De Beers announced the success of their new blockchain-backed platform Tracr, which helped track 100 high-value diamonds throughout their journey from mines to stores, according to a report from Mining Review Africa.

Tracr's unveiling comes only weeks after precious jewel and mineral companies joined forces with IBM to create TrustChain, a similar effort using blockchain technology to determine not just the provenance of their gems, but whether they were mined and processed in an ethical way.

With Tracr, diamonds will be given a "Global Diamond ID" that records carat, color, clarity, and other attributes, the report said. The ID number is used to track the diamond through the supply chain and verify both its source and end destination.

De Beers joined with five other major diamond companies on the groundbreaking project, including KGK Group, Rosy Blue NV, Diacore, Diarough, and Venus Jewel, using BCG Digital Ventures to create the platform itself.

As noted in the report, the hope of De Beers is that the platform will give consumers confidence that the diamonds they are purchasing are real and did not come from conflict mines. Similar to TrustChain, De Beers believes Tracr's industry-wide systems will clean up the supply chain and certify a diamond's origins.

Jewelry conglomerates and mining companies have long kept their own records to prove their goods were real, but much of it was kept internally and relegated to paper, which made it difficult to search through.

In a statement, De Beers explained that Tracr would create an "immutable and secure digital trail...for a selection of rough diamonds mined by De Beers as they moved from the mine to cutter and polisher, then through to a jeweler."

The initial project began in January and has been in testing since then. De Beers believes the platform will be ready by the end of the year and will be open to any diamond companies interested in the project.

"The Tracr project team has demonstrated that it can successfully track a diamond through the value chain, providing asset-traceability assurance in a way that was not possible before," De Beers Group CEO Bruce Cleaver said in the statement. "This is a significant breakthrough made achievable by the close engagement of the pilot participants who share our commitment to industry progress and innovation. We look forward to sharing the platform with more partners in the coming months and capturing their insights before ultimately making this technology available to the broader industry."

More and more industries are turning to blockchain technology to track and source their products, with logistics companies and even livestock conglomerates buying into it in recent months.

But blockchain has gained steam in the precious jewel industry specifically because of overwhelming consumer demand for diamonds and gems that have not contributed to political violence, child labor, or environmental destruction.

"Consumers care deeply about the quality and source of the jewelry they purchase," Bridget van Kralingen, IBM Senior Vice President of Global Industries, Platforms and Blockchain, said in a release on another jewel and gem-related blockchain project. "This is evidenced by the fact that 66 percent of consumers globally are willing to spend more to support sustainable brands."

IBM's TrustChain and this latest effort from De Beers showcase how much of an impact that blockchain could stand to have on global supply chains.

*this article was featured on the Tech Republic website on May 10, 2018: https://www.techrepublic.com/article/de-beers-tracks-first-diamonds-with-blockchain-potentially-limiting-fraud/

IBM's blockchain for jewelry highlights ledger's potential in supply chain, logistics →

TrustChain is a new initiative aiming to help customers determine whether gems and minerals have been ethically mined and manufactured.

Diamond and precious stone buyers have longed for a fool-proof method of determining not just the provenance of their gems, but whether they were mined and processed in an ethical way. Due to the murky nature of the supply chain, consumer demand for a transparent jewelry supply network has largely fallen on deaf ears, save for efforts concerning conflict diamonds.

IBM is hoping to change that with TrustChain, a collaboration with global jewelry industry leaders seeking to use cloud-based blockchain technology to provide "one immutable and continuously updated record of transactions that is shared to all network participants."

The key to the effort is the full-throated buy-in from a consortium of gold and diamond industry players across the world, including Asahi Refining, Helzberg Diamonds, LeachGarner, The Richline Group, and UL, as noted in Thursday press release.

"This initiative is important for our industry as we seek to raise the collective responsibility and provenance practices to new heights," Richline Group CMP Mark Hanna said in the release. "TrustChain is the first blockchain of its kind within our industry, designed as a solution that marries IBM's leading blockchain technology with responsible sourcing, verification and governance by third party organizations, led by UL as the administrator."

TrustChain's website says they want to use blockchain to track "the jewelry supply chain from the mines of origin of the diamond and precious metals, through to the refining, polishing, jewelry manufacturing and shipping the final product to the retail store." By creating one central database with third-party administrators, the technology addresses a major consumer demand and forces companies to be open about where their goods came from.

"TrustChain uses distributed ledger technology that establishes a shared, immutable record of transactions that take place within a network and then enables permissioned parties access to trusted data in real time," IBM said in its press release. "By applying the technology to digitize processes, a new form of command and consent is introduced into the flow of information, empowering those in the blockchain network to collaborate and establish a single shared view of information without compromising details, privacy or confidentiality."

The blockchain allows for stones and metals to be digitally verified and checked by a third party, ensuring that all parts of the supply chain are being honest. Jewelry conglomerates and mining companies have long kept their own records to prove their goods were real, but much of it was kept internally and relegated to paper, which made it difficult to search through.

But surveys over the years have repeatedly shown that a majority of consumers care about whether their purchases are sourced in an ethically and environmentally sound way.

"Consumers care deeply about the quality and source of the jewelry they purchase," Bridget van Kralingen, IBM Senior Vice President of Global Industries, Platforms and Blockchain, said in the release. "This is evidenced by the fact that 66 percent of consumers globally are willing to spend more to support sustainable brands. TrustChain is an example of how blockchain is transforming industries through transparency and viable new business models that specifically benefit the consumer."

The project is still in the development phase, but by the end of the year, six different kinds of diamond and gold rings will be tracked by TrustChain, and consumers in stores will be given digital records of the value chain, the release said.. The gold will come from Couer's Wharf Mine in South Dakota and the diamonds will be sourced from Rio Tinto's diamond mines in Australia and Canada.

Many other industries are turning to blockchain to straighten out supply chain problems and organize haphazard, paper-based record systems. Infamous mining corporation De Beers said earlier this year that it, too, wanted to create an industry blockchain to source and track gems.

Catherine Malkova, IBM's Client Immersion Program Leader, wrote in a blog post that the size and scale of the jewelry industry made it necessary for all of the disparate players to come together and find a solution to a persistent problem affecting employees and customers.

"Whether or not your company follows ethical practices affects both its reputation and consumer trust. In the jewelry industry, this is especially important," Malkova wrote in the post. "Consumers should be able to easily determine whether the gold, diamonds and gems in their jewelry are mined and manufactured ethically and responsibly."

Blockchain is also used to track supply chains in livestock—specifically pork. On top of supply chain, logistics are another key use for the ledger technology, as evidenced by IBM's partnership with Maersk in the Port of Rotterdam.

*this article was featured on Tech Republic’s website on April 27, 2018: https://www.techrepublic.com/article/ibms-blockchain-for-jewelry-highlights-ledgers-potential-in-supply-chain-logistics/