TrustChain is a new initiative aiming to help customers determine whether gems and minerals have been ethically mined and manufactured.
Building a slide deck, pitch, or presentation? Here are the big takeaways:
- IBM and a consortium of jewel companies are organizing a centralized blockchain database allowing them to track any and all gems from mines to consumer check-out aisles.
- Consumers have been clamoring for goods they know are ethically sourced and mined in an environmentally-safe way.
Diamond and precious stone buyers have longed for a fool-proof method of determining not just the provenance of their gems, but whether they were mined and processed in an ethical way. Due to the murky nature of the supply chain, consumer demand for a transparent jewelry supply network has largely fallen on deaf ears, save for efforts concerning conflict diamonds.
IBM is hoping to change that with TrustChain, a collaboration with global jewelry industry leaders seeking to use cloud-based blockchain technology to provide "one immutable and continuously updated record of transactions that is shared to all network participants."
The key to the effort is the full-throated buy-in from a consortium of gold and diamond industry players across the world, including Asahi Refining, Helzberg Diamonds, LeachGarner, The Richline Group, and UL, as noted in Thursday press release.
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"This initiative is important for our industry as we seek to raise the collective responsibility and provenance practices to new heights," Richline Group CMP Mark Hanna said in the release. "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."
TrustChain's website says they want to use blockchain to track "the jewelry supply chain from the mines of origin of the diamond and precious metals, through to the refining, polishing, jewelry manufacturing and shipping the final product to the retail store." By creating one central database with third-party administrators, the technology addresses a major consumer demand and forces companies to be open about where their goods came from.
"TrustChain uses distributed ledger technology that establishes a shared, immutable record of transactions that take place within a network and then enables permissioned parties access to trusted data in real time," IBM said in its press release. "By applying the technology to digitize processes, a new form of command and consent is introduced into the flow of information, empowering those in the blockchain network to collaborate and establish a single shared view of information without compromising details, privacy or confidentiality."
The blockchain allows for stones and metals to be digitally verified and checked by a third party, ensuring that all parts of the supply chain are being honest. Jewelry conglomerates and mining companies have long kept their own records to prove their goods were real, but much of it was kept internally and relegated to paper, which made it difficult to search through.
But surveys over the years have repeatedly shown that a majority of consumers care about whether their purchases are sourced in an ethically and environmentally sound way.
"Consumers care deeply about the quality and source of the jewelry they purchase," Bridget van Kralingen, IBM Senior Vice President of Global Industries, Platforms and Blockchain, said in the release. "This is evidenced by the fact that 66 percent of consumers globally are willing to spend more to support sustainable brands. TrustChain is an example of how blockchain is transforming industries through transparency and viable new business models that specifically benefit the consumer."
The project is still in the development phase, but by the end of the year, six different kinds of diamond and gold rings will be tracked by TrustChain, and consumers in stores will be given digital records of the value chain, the release said.. The gold will come from Couer's Wharf Mine in South Dakota and the diamonds will be sourced from Rio Tinto's diamond mines in Australia and Canada.
Many other industries are turning to blockchain to straighten out supply chain problems and organize haphazard, paper-based record systems. Infamous mining corporation De Beers said earlier this year that it, too, wanted to create an industry blockchain to source and track gems.
Catherine Malkova, IBM's Client Immersion Program Leader, wrote in a blog post that the size and scale of the jewelry industry made it necessary for all of the disparate players to come together and find a solution to a persistent problem affecting employees and customers.
"Whether or not your company follows ethical practices affects both its reputation and consumer trust. In the jewelry industry, this is especially important," Malkova wrote in the post. "Consumers should be able to easily determine whether the gold, diamonds and gems in their jewelry are mined and manufactured ethically and responsibly."
Blockchain is also used to track supply chains in livestock—specifically pork. On top of supply chain, logistics are another key use for the ledger technology, as evidenced by IBM's partnership with Maersk in the Port of Rotterdam.
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