One of my biggest desires for Africa is to start aggressively solving our own problems using emerging technology. I firmly believe that the next generation of problem solutions and innovative thinkers are well equipped to implement custom solutions on the continent. Ideally, these solutions would stop the cycle of poverty and corruption.
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When it comes to the diamond industry, there is no better time than now for new technology to be used to solve the long-standing problem of digging conflict. By using Blockchain, we could eradicate unethical and powerful mining of diamonds and other precious metals, which are often controlled by rebel forces. According to various studies, these rebel forces can earn from 3 to 6 million dollars a year from blood diamonds. What is discouraging is that much of the forced labor is imposed on young and innocent civilians. Mainly in countries like the Democratic Republic of Congo, Sierra Leone, Angola and the Central African Republic.
These rebel forces can earn from 3 to 6 million dollars a year from blood diamonds.
Finding the origin of diamonds has never been an easy or immediate process, and for hundreds of years dishonest people have managed to exploit holes to their advantage.
The good news is that the development of technology in the last few decades has introduced better ways of processing information. My belief is that Blockchain technology is a proactive way to strengthen transparency and trust in the diamond industry. I will explain how below. (If you are unfamiliar with the technology, this article provides a little more background)
One of the leading systems that comes to mind is TrustChain. Unlike many other Blockchains, this one is an “attack with a majority of 51 percent” because it introduces a third party into the signing of each block. This provides “Proof of Confidence”.
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If you are wondering what that means, it refers to this popular question; “Are Blockchains really hackable?”
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The fact is that it is incredibly difficult to hack any Blockchain. Hacking any block would mean hacking each previous and next block before the next block is formed. This becomes exponentially difficult to perform as the chain of blocks grows.
However, this does not mean that hacking is impossible. An individual or group of hackers could gain control if they can hack most of the network’s scatter rate to revise transaction history, which would prevent new transactions from being validated on the Blockchain. Although such an attack is very unlikely and extremely difficult to execute, it is encouraging to know that systems like TrustChain are designed to completely eliminate this possibility.
Improved Kimberley process
The Kimberley Process was enacted in 2000 by the UN to combat the exchange of conflicting diamonds. The problem is that it is still a solution on paper that relies on certifications and the merchant community. Although the initiative aimed to do good, it does not eradicate the possibility of malicious activities within trade communities. What makes Blockchain different is that it leaves no room at any level for corruption or bribery by people. Trust is built into the system, and transactions are open and transparent. No government or system administrator can randomly issue certificates or change information. The nature of the Blockchain architecture is to create a distributed book in which transactions are recorded chronologically and secured using advanced cryptography … making it almost impossible to edit existing data.
Because diamonds have very unique elements as they are created, each transaction would be equally unique. Transactions would record the unique fingerprint of each stone, including its color, carat and clarity, serial number, as well as how much each stone was sold at each touch point. We could follow every step of selling diamonds on Blockchain.
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Cutting the Middle Man
Diamond suppliers often rely on several intermediaries to move diamonds around the world. Eg. Accountants, government officials, lawyers, banks, dealers, etc. The introduction of this technology in the industry would mean that intermediaries will play a less important role in the process, leaving no room for mistakes or corruption.
The future shines brightly like a diamond.
To summarize, it is clear that diamond blockchains are a major milestone in this industry. Organizations like IBM, De Beers, TrustChain and Everledger are jumping on the blockchain. If jewelers, individuals and other large corporations follow it, it can force conflict mines to fall out of the way. This would drastically reduce the profitability of those who sell blood diamonds, which could later lead to the end of the blood diamond era.
Disclaimer: I am not affiliated in any way with the companies and organizations mentioned in this article. You are simply passionately solving the relevant problems of Africa with the help of Blockchain. Below are some links to the mentioned companies.