Diamonds could also be a woman’s greatest pal, however sadly, the billion-dollar diamond trade is rife with scandal and fraud. There have been a lot of circumstances the place lab-grown diamonds have been graded as pure diamonds. An instance of this was seen final yr when the Worldwide Gemological Institute analyzed and graded a 6.18ct lab-grown diamond, which was beforehand claimed to be a pure diamond on its Gemological Institute of America (GIA) report. 

It was additionally reported in 2005 that the Gemological Institute of America — which is among the most trusted sources for evaluating gemstone high quality — was accepting bribes to improve its GIA studies. In line with sources, a lawsuit was filed in opposition to GIA in 2005 on account of funds being accepted to “improve” the standard of diamonds submitted for grading.

As well as, customers are capable of resubmit a diamond for examination at GIA for any purpose. This is called a follow-up service. Consequently, diamonds may be related to a number of grading studies. This may be problematic for customers since they will not be receiving authentic diamond certificates upon buy.

NFTs as a single supply of fact

Sadly, diamond certificates fraud is turning into extra frequent. Areas like India have even developed new frameworks to fight fraudulent actions, as seen within the Diamond Constitution drafted final yr. Whereas progressive, trade consultants have additionally began wanting towards blockchain expertise to assist clear up this rising drawback.

Particularly talking, nonfungible tokens (NFTs) could function an answer with regards to stopping diamond certification fraud. Mike Moldawsky, founder and creator of Diamond Daybreak, instructed Cointelegraph that diamond certification studies must be positioned on a public blockchain community to make sure that paperwork can’t be manipulated. “Having a diamond certificates as an NFT on the Ethereum blockchain can guarantee immutability, proof-of-ownership and visibility for each retailers and customers,” he stated.

So as to display this, Moldawsky defined that Diamond Daybreak is a high-level NFT artwork challenge that may place 333 GIA-certified diamonds on the Ethereum blockchain as ERC-721 tokens. Privately invited contributors will then be capable of buy these diamonds as NFTs. In line with Moldawsky, contributors will be capable of buy a restrict of 1 diamond NFT, with weight various between 0.4-0.8 carats, for the value of 4.44 Ether (ETH). As soon as an NFT is purchased, a sensible contract will mechanically ship the diamond’s GIA certificates to the Ethereum blockchain, serving as proof of possession and verification.

Given the rise of NFTs tied to bodily counterparts, Moldawsky additional remarked that NFT holders can have the choice to create a tangible artwork piece containing a GIA-certified diamond through the Diamond Daybreak web site.

“NFT holders will begin with a digital tough diamond and evolve their NFT on the blockchain (on-chain) with a course of that mimics exactly the in-real life pure diamond course of. Finally, the collector might want to resolve whether or not they wish to hold their diamond digital or burn it and remodel it into its bodily kind,” he elaborated.

In line with Moldawsky, such a course of can also be meant to boost consciousness across the notion that digital NFTs can develop into scarce over time and, due to this fact, extra worthwhile. “As extra collectors resolve to say the bodily artwork piece and burn the NFT, it will scale back the full NFT provide. Consequently, digital NFTs will develop into extra uncommon,” Moldawsky defined. 

He added that the digital diamond artworks have all been created by artist David Ariew, who not too long ago offered his first paintings at Sotheby’s Modern Artwork Night for $224,000, alongside well-known artists comparable to Banksy and Basquiat.

My collaboration piece with Jia Aili, “The Highway Forward” simply offered for $224,000 within the @Sothebys Modern Night Public sale! I’m confused. Thanks a lot to @triple_x_space and a large congrats to @raoulmarks as nicely! You guys are unbelievable!! pic.twitter.com/oeff7zUuku

— David Ariew (@DavidAriew) April 27, 2022

In both case, although, Moldawsky defined that Diamond Daybreak’s diamond certificates will stay on the Ethereum blockchain. “If a person chooses to create a bodily diamond artwork piece, they may obtain the paper GIA certificates along with the certification on the blockchain community. The aim of the challenge is to display proof-of-ownership, transparency and immutability of diamond certificates,” he remarked. 

Olivia Landau, a GIA-certified gemologist and co-founder of The Clear Lower — a digitally native diamond engagement ring and advantageous jewellery firm — instructed Cointelegraph that her agency can also be utilizing NFTs for diamond certification after launching an NFT platform on the Genuine blockchain community in January. She stated:

“NFTs give {couples} buying an engagement ring the choice to have all the diamond’s certificates, insurances, pictures and even their proposal story saved safely on the blockchain for years to return, eliminating the fear of hanging onto hard-to-replace paper copies.”

Landau added that the aim behind the NFTs supplied by The Clear Lower is to digitize and authenticate a diamond’s GIA report and insurance coverage paperwork. “The Clear Lower’s NFTs aren’t meant to be resold on secondary marketplaces,” she stated.

In line with Landau, shoppers who buy a diamond ring from The Clear Lower can have the choice to purchase a corresponding NFT for an extra $500, which is to be paid in fiat quite than in crypto. She famous that present shoppers will even have this selection. 

“Within the beta testing part, over 90% of shoppers expressed preliminary curiosity on this new NFT operate.​ Prospects will obtain a tough copy of their GIA certificates and a replica of will probably be saved digitally, making certain its worth for all times,” she stated.

Will NFTs exchange conventional diamond certificates?

NFTs as digital diamond certificates could also be progressive, but it stays questionable if this idea resonates with the mainstream.

As an illustration, Moldawsky identified that he believes extra training round blockchain is required to ensure that conventional organizations to know the potential behind NFTs. “We have to ask GIA why they haven’t gone digital but. As soon as that dialog is initiated, we will clarify why blockchain expertise is transformative,” he stated.

Whereas this can be, it’s notable that GIA is open to digital transformation. Stephen Morisseau, director of communications for GIA, instructed Cointelegraph that early subsequent yr, GIA will start transitioning all of their gemological laboratory studies to digital varieties. “This must be accomplished that by 2025,” he remarked. Morisseau added that each one of GIA’s printed studies have a number of safety features, noting that the knowledge on any report may be verified utilizing the safe on-line GIA Report Verify service.

Adoption of NFTs inside the diamond trade might also achieve traction as soon as mainstream retailers start implementing the expertise. As an illustration, De Beers is at the moment utilizing the Tracr blockchain to hint the origins of its diamonds.

Jason McIntosh, chief product officer for Tracr, instructed Cointelegraph that NFTs are more likely to be a part of the platform’s resolution sooner or later. “Diamonds on the Tracr platform are ‘NFT-ready’ within the sense that the Tracr diamond document can simply be integrated inside an NFT wrapper,” he stated.

Given this stage of innovation, Landau believes that sooner or later, all diamonds shall be authenticated through a blockchain community. Nevertheless, she identified the significance of making certain that buyers don’t have to fret in regards to the technical features behind NFTs:

“Prospects don’t have to have any crypto or blockchain expertise to realize entry to our NFTs. Every little thing is dealt with for them effortlessly. I imagine it will drive mainstream adoption.”