Diamonds work with various chains, from byzantine to beaded and box. Now the gem just added another: Blockchain. And IBM believes the tech will be a powerful tool in the battle against fakes.
The tech luminary teamed up with the diamond and related industries on a network designed to give consumers the utmost transparency about their gems’ origins.
The recently launched TrustChain Initiative is a multi-industry consortium that reaches across precious metals refining and supply, jewelry design, retail and diamond authentication. Its network — which is powered by the IBM Blockchain Platform and delivered through the IBM Cloud — can trace a piece of fine jewelry through its entire journey, until it reaches a consumer’s hands.
Although the effort was months in the making, the timing couldn’t be better. The fight to fend off fakes has been joined recently by a series of high-profile data breaches, shaking consumer trust in goods and service providers. The hit list includes technology companies and retailers — from Equifax, Yahoo and Facebook, to Under Armour, Saks Fifth Avenue and Lord & Taylor.
IBM’s work with blockchain began with the food industry two years ago, said Jason Kelley, general manager for the company’s blockchain services. Since then, he’s seen how trust influences consumer behavior. “Over 60 to 66 percent of people buy depending on the trust they have in the brand, Nielsen tells us,” he said. “It’s less about the prices, but about the value that they have and what they’re doing.”
In the luxury market, trust and authenticity are crucial factors. Counterfeits have long plagued designer goods, such as Prada bags and Chanel wallets. When it comes to precious gems, the critical need for verification has made certification its own industry.
According to Mark Hanna, chief executive officer of jewelry manufacturer the Richline Group, the precious jewelry sector has been beset by a “trust gap” with consumers, and he believes IBM has the solution. “The ability to create a transparent, traceable, truthful path of product creation and attribute this path to certified responsible sources will be a game changer,” he said.
With blockchain, data is not owned by a single organization, so there’s no unified target for a hacker and no easy way to falsify records. TrustChain does allow “permissioned governance” by IBM and administration by diamond authenticator UL, but neither act as a data repository and “each one of the members has permission to access data at the level at which they agreed upon,” IBM’s Kelley said. Such governance may be necessary for companies to embrace the tech, beyond the experimental stage. He sees TrustChain as a sign of “industry adoption of enterprise blockchain capability,” he added.
In addition to IBM, Richline and UL, the consortium includes precious metals refinery Asahi Refining, retailer Helzberg Diamonds and precious metals supplier LeachGarner. To start, the group is tracking six styles of diamond and gold engagement rings, with more planned over time. TrustChain jewelry is expected to reach participating stores by the end of the year.