Blockchain comes under the spotlight, as specialist panel discusses how innovative technology may affect the jewellery industry
October 15, 2018
Blockchain, a method of securely transferring data through a decentralized online platform, has been earmarked by many as the next great disruptive technology is beginning to make inroads into the jewellery and gemstone sector. It was the focus of a dedicated CIBJO Congress session, the objective of which was to investigate the significance and possible impacts of Blockchain in general, and more specifically in terms of its applications in the jewellery and gemstone sectors.
A powerful tool for recording sequential events, which cannot be altered after the fact, Blockchain is most often associated with Bitcoin and other cryptocurrencies, but the technology is independent of them.
Panel moderator Erik Jens began the session by saying that the general public is still not completely clear about what Blockchain means. “Like many other disruptive technologies before it, while there is near unanimous excitement at the revolutionary potential of the technology, people are still not completely clear on how it works or how to truly use it effectively,” he stated. “Is it just a new buzzword or will it really bring large benefits to the jewellery industry supply chain?”
Delivering the keynote address was Carrie George, Vice President and head of Sustainability Solutions for Everledger, a Blockchain company that has been a leader in development of traceable and responsible supply chains in the diamond, gemstone and jewellery sectors. She was filling in for company founder, Leanne Kemp, who had returned home to Australia to receive an award as the Chief Entrepreneur of Queensland from the federal government and the Premier of Queensland.
Ms. George’s presentation was entitled De-mystifying Blockchain. “We believe that Blockchain will become so ubiquitous that you won’t really ask what it is,” she said. “It will become an embedded protocol.”
In the future, she stated, people will look back it is as an easily understood everyday feature, just “as we take the Internet, cell phones and other technology for granted.”
Blockchain is about building transparency and trust, Ms. George said. At its heart is its ability to track asset provenance and to verify their true provenance.
Traditional databases typically are centralised, she pointed out, but Blockchain allows a vast number of people to interact simultaneously without the possibility of them being tampered with.
“Blockchain can be used for small-scale miners allowing for legitimate market inclusion. We can simplify documentation, improve retailer and consumer confidence,” she said. She said there was a very wide range of uses for the technology in bringing security and transparency – all the way from artisanal miners to the jewellery sector.
The panel discussion featured speakers who are all already involved in the development of applications using Blockchain technology for the jewellery industry
Corrado Facco, a CIBJO Vice President with specific authority for matters relating to Corporate Social Responsibility and sustainability, spoke about a project relating to trade show management. “Trade shows typically involve enormous amounts of organisation. With Blockchain, we can create a digital identity, including elements indicate ethical integrity. This becomes a verifiable record of who is taking part in the shows, building trust and reducing risk of dubious participants participating in the various events.
Mr. Facco also pointed to Blockchain’s financial role. “The project we are involved in involves the creation of digital wallets, enabling trade show participants to pay digitally, within a safe environment.”
Eli Avidar, also a CIBJO Vice President today heads fintech company Carats.io, which is issuing digital tokens that unlike Bitcoin, whose value is governed purely by supply and demand, are backed by diamonds.
Blockchain offers a great many alternatives, he said, like chain of custody verification, transparency and more. “But this is not going to sell diamonds and jewellery. All these things are excellent, but we need more than that,” he stated.
“Blockchain allows us to transfer value. Sending large amounts of money today involves calls from bank compliance officers to check who we all are, and then the money only moves after five days. Blockchain will speed this up and make it immediate.”
Mr Avidar said that from a financial perspective there are major advantages for the jewellery industry. These include superior efficiency with no go-betweens, speeded up payments in just a matter of minutes, reduced or no transfer fees, and improved security, and new financing alternatives in an industry where regular bank credit is increasingly scarce.
“You need to open an electronic wallet and it needs to be done now because that is where the economy is going,” he said.
The final speaker on the panel, Daniel Nyfeler, Managing Director of the Gübelin Gem Lab in Switzerland. He also heads the laboratory’s Provenance Proof initiative, which is developing a range of technologies to improve transparency in the gemstone industry. It is partnering with Everledger to create the Provenance Proof Blockchain for Coloured Gemstones.
Mr. Nyfeler explained that the Blockchain project involved a digital and decentralized ledger that can monitor the movement of gemstones across the supply chain from the mine to the consumer. The Blockchain initiative aims to provide transparency, integrity and security and is applicable to all coloured gemstones, he added.
“I realize that it will not be easy or even possible to engineer all flows, trades, movements of gemstone and precious metals with Blockchain technology short term,” said Mr. Jens, concluding the panel discussion. “What about the smaller or more artisanal type of players in the value chain? What about the flaws in technology? A lot of improvement is still needed. But one needs to a start somewhere and this is the moment when it is happening. Our industry needs to be aware and take advantage of technological innovation, after all, innovation equals sustainability, and that is why we have gathered here together in Bogotá. It is to achieve a better industry in a better world.”