February 23 - 25, 2021
Richline Group Is Using Blockchain to Improve Transparency in the Diamond Industry
Brought to you by WBR Insights
Blockchain technology has been hitting the headlines for a few years now. As the technology which underpins cryptocurrencies such as Bitcoin and Ethereum, blockchain offers an elegant method of carrying out transactions without the need for a central authority - such as a bank.
Based around an immutable ledger stored on multiple computer networks, blockchain records each step of the transaction in a block, complete with a complex alphanumeric hash code. Each block in the chain then generates its own hash which contains information from the previous entries. Should the blockchain become compromised and any information altered, the change to the hash is immediately apparent to all interested parties - because it's nearly impossible to change it on all storage networks simultaneously. It's this transparency which gives blockchain its much-vaunted security.
Whether cryptocurrency is truly the future of finance remains to be seen. However, blockchain technology has many potential applications beyond money, and it's something Richline Group is looking to apply to the diamond industry.
Some claim that the diamond industry is one of the many that has been "killed" by millennials. It's not true, but the fact is that the younger generations are more likely to spend their money with brands which align with their own moral compass. Therefore, if millennials are responsible for any decline in the diamond industry, it will only really affect those companies which don't prioritize ethical sourcing.
When buying diamonds, more and more people today are likely to want to know where the stones came from, how the seller obtained them, and whether they were responsibly sourced. With blood diamonds - diamonds mined by slaves and sold to finance conflicts - still being a massive concern in the world, the onus is on retailers to be able to provide this information to their discerning customers.
At this point, you may be asking yourself what this has to do with blockchain.
One of the most promising applications of blockchain outside of finance is in supply chains. Blockchain can be used to record all the stages in a shipment's journey and establish whether it has passed through or originated from any countries which have a reputation for unethical practices. And it's this aspect of the technology which Richline Group wants to use to sell its own diamond products with the ethical confidence customers demand.
"Blockchain and the jewelry industry were made for each other," said business transformation consultant, Anne Miller. "Provenance and responsible sourcing are critical industry challenges that blockchain can address. With blockchain, you have shared access to data, and when you get to the data, it's accurate. As transactions move from point to point, you know who you are engaging with, that the thing is what it says it is, and that what's supposed to happen is happening. All of this is moving in real time - cutting out friction, delays, and intermediaries."
To facilitate this transformation, Richline Group is using IBM's proprietary blockchain platform TrustChain - built in collaboration with Richline Group themselves specifically for the digital jewelry business.
TrustChain uses blockchain technology to track and authenticate diamonds and other precious metals at every step on their journey - from when they're first dug out of the ground, right up to becoming a finished piece of jewelry. The platform comes complete with digital verification, physical product and process verification, and third-party oversight.
"It is about the five Ts for suppliers and retailers to provide for consumer ethical concerns - track, trace, transparency, truthful, and trusted," said Chief Marketing Officer for Richline Group and TrustChain Cofounder, Mark Hanna. "Socially responsible sourcing is imperative in the jewelry industry. The blockchain protocol/platform provides the technical system to optimize a chain of custody documentation inclusive of every participant in a product's journey."
When listing its jewelry products on its ecommerce store, Richline Group can now include all the information of each piece's journey customers need to make an informed and ethical decision. 75 percent of global Millennials and 66 percent of all consumers have openly stated that they are willing to pay more for a product if they know it has come from sustainable and ethical sources.
Blockchain technology is helping Richline Group provide this information in a confident and inarguable manner - driving sales and helping to justify the cost of product development to digital customers.
"This initiative is important for our industry as we seek to raise the collective responsibility and provenance practices to new heights," concludes Hanna. "TrustChain is the first blockchain of its kind within our industry, designed as a solution that marries IBM's leading blockchain technology with responsible sourcing, verification and governance by third-party organizations, led by UL as the administrator."
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