There are many ways that blockchain is being used, but precious few of them revolve around solving non-commercial, societal issues. A major exception is how several developers are using the technology to tackle a problem that has lingered for far too long — the global blood diamond trade.
Over the past few years, the rapid adoption of blockchain technology has promised to solve long-standing problems for business and consumers alike. If you look around, it’s turning up everywhere, from the Walmart produce supply chain to private home sales in California. As the quantity and variety of uses for the blockchain have grown, so too have hopes for what the technology ultimately might be able to accomplish on a broader scale, particularly when applied to longstanding societal needs and problems.
Some people envision it as a solution to major imperatives such as securing election systems within democratic nations, and others hope to see it put to use to help establish property rights within developing nations. The list of ways that technologists hope to see blockchain provide societal benefits is vast, but so far, examples of such uses have been few and far between. There is, however, one remarkable example of blockchain technology being brought to bear on a major problem that has defied every other attempt at a solution for almost 30 years, and it’s connected to something you might not expect — diamonds.
The Tragedy of Blood Diamonds
To understand how the blockchain relates to diamonds, you must first be familiar with the problem it’s being used to solve. The problem is that despotic and revolutionary governments throughout the African continent have used the illicit sale of diamonds to fund civil wars, human rights abuses, and countless other barbarisms ever since the early 1990s. The practice was so widespread and so destructive that it inspired a name: blood diamonds. The problem became so bad that in 2001, the United States even banned the trading of rough stones that came from Liberia or Sierra Leone, where some of the worst abuses occurred. Still, blood diamonds remained a problem because they are exceptionally difficult to trace in a commodity industry where products change hands (and countries) sometimes dozens of times before ending up within a traceable retail supply chain.
In an attempt to combat the problem, a coalition of representatives of 81 countries came together to create a pact known as the Kimberley Process, which was so named after the city where the group convened. It required all signatories to commit to specific control processes and certification requirements that would govern all diamond commodity transactions. It was hoped that the self-regulation would be enough to end the blood diamond scourge, but Human Rights Watch and others have concluded that the voluntary system is ineffective, partially because it remains so difficult to identify violations of the pact. That’s exactly where the blockchain comes in.
A Global Immutable Registry
Beginning in 2015, just as Bitcoin was beginning to enter the public consciousness and entrepreneurs were starting to find ways that the underlying technology might be adapted, a startup called Everledger built and began operating a new diamond registry using the blockchain. The idea was brilliant in its simplicity: a blockchain diamond registry could guarantee that any diamond entered into the system at its’ source could then be tracked all the way through the supply chain with no chance that anyone could swap it for a different stone along the way. That would not only eliminate fraud and deception in the diamond trade, it would also put an end to blood diamonds because there would no longer be a way of slipping them into the global supply unnoticed. Everledger’s CEO Leanne Kemp sums the concept up thusly: “…We have seen and continue to see issues around fraud, where people will duplicate or document-tamper certification… Everledger provides a digital-reconciliation mechanism. If a certificate is created in Country One, that data exists on a global ledger, so that Country Two is able to access real-time validation and reconciliation of those certificates.”
An Idea Gaining Traction
The idea behind the Eveledger platform was promising enough that it got the attention of diamond industry heavyweight De Beers, who has since launched their own blockchain platform designed to ensure the authenticity and provenance of the diamonds passing through their vast global supply chain. The system, known as Tracr, is significant because De Beers controls about 30% of the global rough diamond trade and is therefore in a unique position to have an outsize impact on ending the blood diamond trade once and for all.
The good news is that the major stakeholders that control the much of the rest of the world’s diamond supplies are now starting to follow suit. This February, the Russian state news agency TASS reported that the diamond supplies originating there would now be traceable on a new blockchain platform, known as Bitcarat. Although the specific details of the system are not yet known, the system would sound a death knell for blood diamonds, since Russia controls diamond reserves greater than all other diamond producing nations combined. That means the combination of a controlled Russian diamond supply, the De Beers effort, and Everledger stand a real chance of finally bringing the illicit diamond trade to an end.
The Bottom Line
The way that blockchain is helping to solve a massive and long-standing human rights issue by ending the blood diamond trade is a shining example of how the technology might serve the public good. It’s unknowable when the convergence of the blockchain platforms mentioned here will succeed in their stated missions, but in four short years, they have already accomplished more than any other attempt to solve what is an odious and unacceptable problem. If nothing else, it should serve as a clarion call for other blockchain developers to turn their attention toward using the technology to solve other societal ills. If they do, blockchain may yet be remembered not as the technology of Bitcoin and private corporate interests, but as a tool to make our world a better, more equitable place to live — and that would be pretty cool, wouldn’t it?