Diamonds are some of the world’s most valued gemstones, and the global diamond industry has managed to remain afloat despite being partially eclipsed by the emergence of modern stocks and novel virtual assets.
The diamond industry, however, appears to be undergoing a paradigm shift in recent times — incorporating modern technology such as blockchain to improve diamond production, tracking and ultimate sales.
Leanne Kemp, CEO of independent technology company EverLedger, stressed the need for blockchain integration in the industry to improve the tracking of a stone’s provenance.
Speaking on the issue of data manipulation concerning a diamond’s provenance four years ago, Kemp noted that “we see document tampering where one stone has been claimed across similar timelines with multiple insurers.”
While it has yet to directly provide a solution to all the concerns of the diamond industry, blockchain is being used to solve a few of them by facilitating transparency that helps track the provenance of diamonds. This is primarily aimed at suppressing the sales of “conflict diamonds.” Diamond mining corporation De Beers Group has pointed out the potential of blockchain in the industry for increased accuracy, trust and transparency with regard to determining a diamond’s origin.
The diamond industry maintains its distinction
Despite being impacted by the Great Recession of 2008, which saw the general stock market slump by an unprecedented margin, the diamond industry has managed to maintain its prominence notwithstanding a noticeable drop in global production of rough diamonds.
The idea of integrating blockchain into the industry — which was only introduced in recent years — is likely to reawaken mainstream interest and further improve global production.
The years leading to 2008 saw a steady increase in rough diamond production. According to data from German database company Statista, from 2005 to 2008, global production of rough diamonds never went below 160 million carats.
Following the economic decline of 2008, however, the average production in the last decade has averaged 142 million carats with 116 million carats produced in 2021. The year 2017 saw the largest turnover in the decade, with 152 million carats of diamonds produced.
About 99% of the global diamond mining process is carried out in nine countries with Russia, Botswana, The Democratic Republic of Congo, Australia and Canada respectively considered the top five countries involved. Diamond mining is almost monopolized, with companies such as ALROSA and De Beers controlling a large portion of the industry.
Decentralized blockchain technology has been around for a relatively short period of time, in the grand scheme of things, but its decentralized nature has the power to keep data and information out of the hands of censors looking to create a “safe” and “faultless” version of history.
Blockchain is permissionless and literally owned by no one. So, while we can’t save the Alexandria libraries of the past, we can make sure the future is well equipped with the tools necessary to preserve historical records.
Here we’ll look at some of the ways nonfungible tokens (NFT) and blockchain technology have been used for keeping archives, the potential downfalls of such technology, and what the future holds for blockchain-based storage systems.
NFTs and archives
While many current use cases surrounding NFTs deal with digital art, there is another side of nonfungible tokens that has only started to be explored.
Keeping an archive can be a costly and time-consuming endeavor, but NFTs can serve as a form of fundraising to support archival development.
For example, fashion designer Paco Rabanne is selling NFTs to fund his physical archive and support his brand name.
Furthermore, the technology itself can be used as means to store information.
Archangel, a test project of a “trusted archive of digital public records” at the Unversity of Surrey, has done just that. From 2017 to 2019, the university was able to create a test blockchain archive storage system that used distributed ledger technology (DLT) and NFTs and shifted “from an institutional underscoring of trust to a technological underscoring of trust.”
Cointelegraph reached out to Foteini Valeonti, a research fellow at University College London and founder of USEUM Collectibles — an organization advising museums, policymakers and cultural organizations on NFTs — to talk about the role of blockchain and NFTs in archives.
Valeonti said that blockchain technology can be a way for museums to “leverage their inherent capacity for provenance and metadata consolidation. So that, finally, each museum exhibit will only have one unique identifier across different institutions, projects and all kinds of different information systems.” It could be a way to track which museum owns what and who had it last.
Last year, the family of the Hobby Lobby empire was found to have hoarded 17,000 ancient Iraqi artifacts looted during the war. This breach of security of ancient artifacts shows that in times of war and instability, the right (or wrong) person can come and steal prized pieces of cultural identity.
The subsequent difficulties in repatriating the stolen artifacts highlight the problem of how cultural items are often poorly cataloged. Valeonti added:
“Keeping unique data for provenance’s sake could help resolve numerous information science challenges that the cultural heritage sector is currently facing.”
Ukrainian officials have used funds from the crypto donation platform launched by the government to purchase supplies for the country’s military amid its ongoing war with Russia.
In a Friday tweet, Ukraine’s minister of digital transformation, Mykhailo Fedorov, announced that the country had purchased five all-terrain vehicles, which “will come in handy for a challenging environment” — possibly referring to conditions near the front lines with Russia or where roads have been damaged or destroyed. Funds for three of the ATVs originated from Aid for Ukraine, a platform the government launched in March that accepts crypto donations “to support people in their fight for freedom.”
At the time of publication, Aid for Ukraine has reportedly raised more than $60 million in Bitcoin (BTC), Ether (ETH), Tether (USDT), Polkadot’s DOT, Solana’s SOL and USD Coin (USDC). Fedorov reported on Wednesday that the government had already used some of the funds to supply 5,000 gas masks to state border guards and the army. Aid for Ukraine has also purchased more than 5,000 “optical and thermal imaging devices” for the nation’s military since the war began; tablets aimed at helping Ukrainians escaping the country find accommodations and aid; bulletproof vests; medical supplies; vehicles; and clothing
Since the beginning of the Russian military invasion in February, the Ukrainian government has turned to the crypto space many times as a solution for receiving funds from concerned parties. Fedorov announced in April that the government would accept contributions toward the war effort in the form of nonfungible tokens, or NFTs, which will in turn be sold to “contribute to the Ukrainian victory,” and it recently launched a charity NFT collection with pieces from Ukraine's video game developers and digital artists.
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