cryptodaily.co.uk
Manipulation and fraud in the diamond industry goes on to this day. The Diamond Dawn NFT collection showcases an elegant solution to the problem.
A $100 billion problem
In the diamond industry there are factors in how a diamond is graded that make the most enormous amount of difference. Suppose you have a pink diamond that is worth $130,000 per carat. You’d be in the money, but, if your diamond were red, the change in value ($4.5 million per carat) could be life-changing.
So could the colour be upgraded in order to benefit from the huge change in value? You might think that the colour is the colour, but in the diamond industry today anything appears to be possible.
To begin with, who decides the colour anyway? This isn’t something your average consumer can evaluate. To grade a diamond requires training and specialist equipment.
Several companies offer professional diamond certification services. The certificate lists all a diamond’s natural attributes, and therefore the paper certificate is needed in order to establish the trust that is recognised across the industry.
Bribery and fraud
In order to get your diamond properly certified, according to the industry, you need to hand it over to a certification company for review. Once the review process is complete, you receive your diamond certification with the listed grading for each attribute.
However, this process can be manipulated, and the characteristics of the diamond can be changed. It was revealed in 2005 that the GIA, one of the most trusted sources of diamond evaluation, was accepting bribes to change and upgrade the attributes of diamonds in its reports.
Even if the diamond industry may have cleaned up its act since, for the whole industry to rely on certificates that are stored on paper ledgers held by the biggest certification companies is problematic. How do we know whether certificates have been tampered with?
Introducing Diamond Dawn
“I founded Diamond Dawn to demonstrate how decentralized technology can create a REAL-LIFE impact”.
Mike Moldawsky, CEO, Diamond Dawn.
An NFT project designed to solve real-life problems, Diamond Dawn demonstrates how decentralised NFT technology can solve the massive problems that beset the diamond industry, including that of certification fraud.
So how is this done?
The Diamond Dawn project locked 333 REAL GIA certified diamonds in a vault in the Israeli Diamond Exchange centre. The team developed a smart contract that can represent the attributes displayed on a GIA certificate, and the corresponding traits of all 333 diamonds were injected into it, effectively creating the first ever set of on-chain diamond certifications.
The project partnered with artist David Ariew, who recently sold his first digital artwork at Sotheby’s, and he designed the digital counterparts to the 333 physical diamonds.
A 6-month project
The project has two main objectives:
- To demonstrate the disruptive power of decentralised NFT technology and show how it can be used to solve real-world problems.
- To explore if digital assets can hold a greater value than physical ones.
The project is divided into 4 phases.
The first three phases take place exclusively in the digital realm, while the fourth and final phase can take place in either the digital or physical world.
Over these four stages, collectors will evolve their digital diamonds on the blockchain through a process similar to the natural diamond manufacturing process in the real world.
At the final stage, collectors will have to choose:
- Keep the diamond in its digital form forever.
- Burn the digital diamond in exchange for a luxurious ~8kg artwork containing their physical GIA-certified diamond delivered to their doorstep.
NFT technology will disrupt all industries
A lot of people associate NFTs with simple artworks that might be bought and flipped to make a profit. This is far from the truth. The technology is actually only limited by human imagination at this point, and will be used to disrupt every industry in the most remarkable ways.
NFTs enable anyone to own an asset, or a fraction thereof, and to be able to indisputably prove its ownership and provenance, and be able to verify this authenticity beyond the shadow of a doubt without having to rely on any third party.
Diamond Dawn will demonstrate the power and utility of this technology in the real-life situation of the diamond industry. The project marks the beginning of a new era where blockchain and NFT technology enter traditional industries.