A Diamond Exchange Marketplace Based On Blockchain

Despite being complex and risky, the diamond business has been evolving daily. The main challenges it has faced for decades are a lack of transparency and trust. If you’ve been in this industry long enough, you know that these are traditional challenges; they didn’t start today.

Maintaining precise records of the sources of diamonds has been challenging for a long time. And it hasn’t been easy to keep records of transactions between diamond buyers and sellers. Also, tracking sellers who fraudulently sell lab-grown diamonds as natural ones have been an issue.

Stakeholders in this industry have been working around the clock to find a lasting solution. This is why blockchain is fronted as one of the most efficient tools. Diamond traders use it to streamline transactions. This article will take an in-depth look at how blockchain helps diamond exchange marketplaces.

Let’s dive right into it, shall we?

Blockchain In A Nutshell

Before we go deeper into this topic, you need to have a background in the blockchain. A blockchain is a database or ledger used to store digital records. It is usually visible to a large community or P2P network. Any member can update the catalog at any time but can’t change the already existing transactions.

Blockchain is made of many nodes that verify transactions by following various algorithms. A verified transaction becomes a “block of data.” A blockchain is formed when several blocks of data are linked up. It’s impossible to alter or interfere with data once a blockchain is created.

Also, remember that many people contribute to the data that forms a blockchain. This means no one can claim to be the sole owner of any blockchain. Thus, it becomes a secure, verified, and decentralised system. Also, it acts as a verified public ledger for the community.

What Is Blockchain Used For?

Blockchain has a wide range of uses in various industries. We have already mentioned its application in the diamond industry. It helps track transactions to prevent fraudulent activity in diamond trading. Also, it helps protect gullible buyers from malicious traders.

You can get tricked into buying lab-grown diamonds when looking for natural ones. Or, a seller might purport to sell you the lab-created diamonds but deliver fake ones in the real sense. Blockchain in diamond trading is helping boost transparency and security in trading.

So, what does blockchain do for the diamond exchange marketplace?

• Removing intermediaries – The diamond exchange marketplace has been running with intermediaries along the way. Diamond buyers used to engage intermediaries to find the best lab-created diamonds. Lab-created diamonds are similar to natural mined diamonds in physical and chemical properties but are way cheaper.
• Also, intermediaries played a role in the licensing of trademarks. But they’re now redundant with blockchain in the picture.

• Ensuring anonymity of the purchases – One way to secure your diamonds is by providing anonymity of assets. You can do this by transacting with the dealer using blockchain. But it would help if you found a blockchain network that is anonymous because most aren’t.

• Simplifying data management – Blockchain stores data from transactions in the diamond exchange marketplace. It also helps boost security, integrity, traceability, immutability and data sharing.

• Protecting intellectual property – Blockchain also plays a central role in ensuring intellectual property protection. It enables the licensing of trademarks, a process it has helped automate and make more efficient.

Also, blockchain applications keep increasing from time to time. Its influence is also growing from industry to industry. There are various theories and speculations on other potential applications of blockchain. Here’s how blockchain is already being used in various industries.

• Cryptocurrency – Bitcoin has previously been referred to as the heart of cryptocurrency. You cannot deny this fact because it keeps all the history and records of the crypto world.

• Smart contracts – These are programs stored on blockchains and they only run when specific predetermined conditions are met. Blockchain helps streamline them by ensuring there’s no need for an intermediary party.

• Medical records – Keeping and retrieving medical records can be tricky. Blockchain is helping to store patient data in a decentralised system accessible by various doctors.

• Stock market – Stock trading is a complicated process involving complex transactions. The businesses in the stock market consolidate millions of transactions using blockchain.

• Real estate – The purchase and sale of a property can also be risky. Using blockchain in the future will help mitigate these risks and increase transparency for customers and companies.

As we’ve seen, blockchain has various applications beyond diamond trading. As a diamond enthusiast, its applications in the diamond industry must matter to you.

We have explored how diamond jewelry buyers and sellers can use it.

How Has The Blockchain Technology Impacted Diamond Trading?

Undoubtedly, blockchain is already making a difference in the diamond industry. An industry that has struggled to maintain authentic records for decades has undergone a complete transformation. It has become possible to keep an eye on each transaction.

It can be tricky to tell the origin and journey of diamonds as a consumer. Diamond goes through a long trail before it reaches the final user. The miner, the manufacturer, and the retailer can interfere with the authenticity of diamonds, making it critical for the buyer to be keen.

Blockchain is already helping the diamond industry to reduce suspicion and improve trust. It is almost impossible for any of those players to interfere with diamonds when they go through the publicly available ledger on blockchain. The history of the origin and the journey the diamond has taken before reaching you will get stored in the blockchain.

A Tool For More Streamlined Transactions

Transparency and customer trust are important in any business. You can’t buy diamond jewellery from a dealer you don’t trust. Likewise, you can’t attract customers and make sales if they don’t trust your business. You should assure the safety of your products and make them want to buy from you.

Diamond trading involves high-value transactions. Depending on the quality, even the smallest diamond studs can cost a fortune. This makes it critical to do background checks and put in measures to ensure the safety of transactions. That’s why blockchain is considered a solution.

Many jewellery buyers are opting to purchase using crypto tokens. They need smart contracts as proof of ownership of the jewellery they buy. Blockchain, as said earlier, helps keep records of these smart contracts.

Diamond Industry Embracing Blockchain Technology

Blockchain is a hot trend that’s taking the technology industry by storm. It’s not surprising that it is already impacting the diamond industry. It helps streamline transactions and ensure transparency. It has now become easy to track and authenticate every transaction happening in the industry.

Although blockchain is big in many industries, it’s yet to go mainstream. This means not all companies that do diamond trading are leveraging the power of blockchain. Thankfully, some of the biggest brands in the market are already testing or using it, so its mass adoption isn’t far.

Therefore, you should start embracing blockchain if you trade diamonds. You can start buying diamond jewelry from companies that use blockchain technology. It’s possible to buy small earrings or a diamond wedding band using this technology; therefore, it won’t limit you.

Conclusion

The diamond exchange marketplace has changed a lot recently. Blockchain has played an integral role in streamlining trading. You can now trade diamonds with more trust, better security, and more transparency. It’s getting all the traditional security challenges out of the way.