The diamond ecosystem is expected to be the biggest beneficiary from the distributed ledger technology. Blood diamonds or conflict diamonds have found a place on the online marketplace of the world. This is a news excerpt from an investigative report from an agency that is engaged in extensive online research. Fraudulent digital activities have been picked up on social media by fictitious buyers. The agency using its extensive research has also identified multiple messenger platforms in the form of WhatsApp have been used extensively to trade in expensive illegal diamonds.
To prevent the circulation of blood diamonds within the business ecosystem, the United Nations formulated the Kimberley Certification process during the early 2000s. The world diamond community in collaboration with the European Union took a tough stand against the exploitation of workers in diamond mines who sometimes were subjected to slavery. Such diamond mines are purposely run to fund conflicts and terrorist funding. For long, the diamond industry sought a platform that would completely solve the problem of conflict diamonds.
A feasible blockchain-driven solution
Distributed Ledger Technology stands as the most powerful solution to the problems associated with the traceability of diamonds leading to the thriving blood diamond trade. Blockchain with the blessings of certain rare properties has the capacity to trace diamonds back to its origin! It has the ability to map the entire journey of the diamond right from the mine to the ring finger of a gorgeous lady!
- The blockchain technology allows for certification without the need for third-party intervention
- The data structure in a blockchain is immutable. So, the data remains unchanged.
- It uses hyper crypto graphical protection of the data ledgers. Also, the new ledger is reliant on its next completed block to fulfill the cryptographic recording. All data recorded and associated with the diamond is recorded from point zero.
- All the transactions and data are connected to the block after the execution of maximum trust verification. There is a consensus formation of all the ledger participants on the things which need to be recorded in the block.
- The transactions are recorded in the order of a timeline or timeframe. Thus, all the blocks within the blockchain are time stamped which implies that there cannot be edits made on the same. None of the participants can edit the source of the origin of a diamond in order to accommodate a conflict diamond.
- The ledger is distributed across every single node in the blockchain within the members. So, it is distributed.
- The transactions stored in the blockchain blocks are stored in millions of computers participating in the chain. Hence the entire ecosystem is decentralized. There is no possibility of data being lost completely.
- The transactions getting validated within the ecosystem of the diamond industry are transparent. The individuals who get authority within the architecture have the freedom to view the transaction.
- The source of any ledger or the corresponding gemstone can be tracked along the chain back to its point from where it originated which makes it impractical for conflict diamonds to enter the trading periphery.
- Using multiple consensus protocols for validation of the transaction, it removes the risk of duplication or fraudulence.