Case Study: De Beers and the Use of Blockchain in the Diamond Industry

Company Background

De Beers, a company with a rich history dating back to 1888, is a leading player in the diamond industry, known for its vast operations in mining, retail, and trading of diamonds worldwide. With its mission to "turn diamond dreams into lasting realities," De Beers has been at the forefront of innovation, ethical sourcing, and sustainability within the industry. A key achievement for De Beers has been its ability to maintain its position as one of the world's largest diamond producers while navigating the challenges of ethical sourcing and authenticity in the diamond market.

The Problem 

Blood diamonds, also known as conflict diamonds, are gems mined in war zones and sold to finance armed conflict against governments. Throughout the late 20th and early 21st centuries, these diamonds have been at the heart of significant human rights abuses in war-torn areas, particularly in Africa. The global diamond industry, including major players like De Beers, faced intense scrutiny and pressure to ensure that diamonds reaching the market were not contributing to violence and exploitation.

De Beers' initiative with blockchain technology aimed to address these concerns by providing a transparent, unchangeable ledger of a diamond's journey from the mine to the marketplace. This technology seeks to guarantee the ethical sourcing of diamonds by proving their origins are not from conflict-affected areas, thereby helping to eliminate the trade in blood diamonds. By ensuring transparency and trust in the diamond supply chain, De Beers aimed to restore consumer confidence and contribute to the broader goal of ending the trade in conflict diamonds.

Blockchain Implementation

In response to growing concerns over "blood diamonds" and the ethical sourcing of gemstones, De Beers began developing Tracr in 2018  as a comprehensive response to the industry-wide demand for greater transparency and ethical assurance in the diamond supply chain. Recognizing the potential of blockchain technology to provide a secure, unalterable record of transactions, De Beers embarked on creating Tracr to track the journey of diamonds from the mine to the final consumer. The development involved close collaboration with various stakeholders across the diamond value chain, including miners, cutters, polishers, manufacturers, and retailers, ensuring that the platform catered to the entire ecosystem's needs and concerns.

Tracr works by assigning a unique digital code to each diamond registered on the platform. This digital code records key attributes of the diamond, such as carat, color, and clarity, along with its journey through the value chain. Each transaction or movement of the diamond is recorded on the blockchain, creating a tamper-proof and permanent history. This process not only assures the provenance and ethical sourcing of the diamonds but also enhances trust among consumers, who are increasingly concerned about the ethical implications of their purchases. 

By providing a clear, transparent ledger of a diamond's journey, Tracr aims to set a new standard in the assurance of diamond authenticity and ethical sourcing in the industry.  As a further reward for its efforts, Tracr was named by Forbes as one of the world’s 50 leading blockchain solutions.

Let’s recap the solutions/benefits provided by blockchain in this case study:

• Provenance Verification: Ensures customers that the diamonds they purchase are ethically sourced and not from conflict zones.

• Counterfeit Reduction: Helps in reducing the circulation of synthetic diamonds passed off as natural.

• Enhanced Trust: Builds consumer confidence in diamond transactions by providing a transparent journey of the diamond.

Lessons Learned

From De Beers' journey in implementing blockchain, several insights can be gleaned:

Industry Collaboration is Key: For blockchain initiatives like Tracr to succeed, cooperation across the industry is essential. By involving various stakeholders in the diamond supply chain, De Beers ensured broad acceptance and effectiveness of the platform.

Technology as a Trust Enabler: The case study demonstrates how blockchain can be leveraged as a powerful tool to build trust in industries plagued by ethical and authenticity issues.

Innovation Beyond Product: De Beers' use of blockchain highlights the importance of innovation not just in product development but also in how products are sourced, verified, and sold.

De Beers' blockchain initiative represents a significant step forward in addressing the long-standing challenges of the diamond industry, showcasing the potential for blockchain technology to bring about positive change and greater trust in global supply chains.

Learn more about Tracr on its official site.

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• Hashed Out Main Page

• Blockchain 101

• The Editorial: Why Blockchain Matters