One of my biggest wishes for Africa is that we begin to aggressively solve our own problems using emerging technology. I strongly believe the next generation of problem solvers and innovative thinkers are well equipped to implement tailored solutions on the continent. Ideally, these solutions will stop the cycle of poverty and corruption.
When it comes to the Diamond industry, there is no better time than now to use emerging technology to solve the long running issue of conflict mining. By using Blockchain we could eradicate the unethical and forceful extraction of diamonds and other precious metals, which is often controlled by rebel forces. According to various research studies, these rebel forces can make anywhere from $3 million to $6 million per year from blood diamonds. What is disheartening is that much of the forceful labour is imposed on young and innocent civilians. Mostly in countries like the DRC, Sierra Leone, Angola, Central African Republic.
These rebel forces can make anywhere from $3 million to $6 million per year from blood diamonds.
Tracing the origins of diamonds has never been a simple or straight forward process, and for hundreds of years dishonest people have managed to use the loopholes for their own benefit.
The good news is the developments in technology over the last few decades have introduced better ways of processing information. My belief is that Blockchain technology is a pro-active way of enforcing transparency and trust in the Diamonds industry. I will explain how below. (If you are not familiar with the technology, this article provides a bit more background)
One of the leading systems that comes to mind is TrustChain. Unlike many other Blockchains, this one is resistance to a “51 percent majority attack” because it introduces a third party in the signing of every block. Thereby ensuring “Proof of Trust’.
Hacking a Blockchain
If you are wondering what that means, it relates to this popular question; “Are Blockchains are really un-hackable?
In the event you loved this article and you would like to receive more information about yield i implore you to visit our own website.
”
The fact is, its incredibly difficult to hack any Blockchain. Hacking any one block would mean having to hack every preceding and subsequent block before the next block is formed. This becomes exponentially difficult to do as the chain of blocks grow.
However, that does not mean a hack is impossible. An individual or group of hackers could gain control if they can hack the majority of the network’s hash rate to revise transaction history, this would prevent new transactions from being confirmed on the Blockchain. Although such an attack is highly unlikely and extremely difficult to execute, it is reassuring to know that systems like TrustChain are designed to completely eliminate this possibility.
Kimberley Process Improved
The Kimberley process was enacted in 2000 by the UN to combat the exchange of conflict diamonds. The problem is that it is still a paper based solution that relies on certifications and a community of traders. Although the initiative was intended to do good, it does not eradicate the possibility of malicious activity within trading communities. What makes Blockchain different is that it leaves no room for corruption or bribery by humans, at any level. The trust is built into the system and transactions are open and transparent. No government or system administrator can randomly issue certificates or alter information. The nature of Blockchain architecture is to create a distributed ledger where transactions are recorded chronologically and secured using advanced cryptography… thereby making it virtually impossible to edit existing data.
Diamond Data
Since diamonds have very unique elements to how they were formed, each transaction would be equally unique. Transactions would record the unique fingerprint of every stone including its colour, carat and clarity, serial number as well as how much each stone was sold for at every touch-point. We would be able to trace every step of a diamond sale on the Blockchain.
Cutting out the Middle Man
Diamond suppliers often rely on several intermediaries to move diamonds across the globe. E.g Accountants, Government officials, lawyers, banks, dealers etc. Introducing this technology to the industry would mean that intermediaries will play less of an integral role in the process, leaving no room for errors or corruption.
The Future is shining Bright Like a Diamond.
To summarize, its clear that diamond Blockchains are a major turning point in this industry. Organisations like IBM, De Beers, TrustChain and Everledger are jumping on the Blockchain bandwagon. If jewelers, individuals and other large corporations follow suit, it may force conflict mining to fall by the wayside. This would drastically reduce the profitability of those selling blood diamonds, which may subsequently lead to the end of the blood diamond era.