Many industries are currently looking at building blockchain-based applications that will improve their various processes and systems. Now, the jewelry industry that moves precious metals and gems, such as gold and diamonds, is researching how blockchain technology can provide transparency to their supply chain in order to minimize third-party transaction fees and discourage fraudulent activities.
In one of the most recent CoinGeek Conversations, host Charles Miller gives audience a sneak peak at the diamond industry supply chain and how blockchain technology can improve their system by letting Stephan Nilsson, founder and CEO of Norway-based enterprise blockchain platform UNISOT, and Sukhi Jutla, co-founder and CEO of London-based online platform MarketOrders that deals with gold and diamonds speak with each other. The former is an experienced blockchain developer who has successfully applied the innovative technology to improve the seafood supply chain, while the latter is still in her research phase hoping to develop her own blockchain-based supply chain.
“In our industry, we are dealing with very high-value precious products that are typically sourced from one area or one country, you know, like a gold mine in Africa. And then that raw product is sent to another country where it’s processed. And then it’s moved to another destination where it’s designed. And then it’s moved on to another destination where it’s eventually sold. So, the products that are being moved across in my industry have many, many third parties and middlemen. And so, there’s a lot of processing that’s happening. But I don’t feel that there’s always that level of transparency. And I myself have had instances where I have ordered products from an international country such as Hong Kong or Singapore, but when it reached the destination, such as the UK, the products had actually been opened and some items have been swapped out for lower quality products…. And who was to blame for this? It’s because the supply chain process wasn’t as transparent as could be,” Jutla said.
After explaining how the jewelry industry’s supply chain works and how it needs transparency, Jutla proceeded to detail her plans of building a tokenized blockchain-based payment system, as well as installing nano chips in each piece of jewelry to mitigate costs in transaction fees, delays, fraud and other problems experienced in her industry. To this, Nilsson advised looking for a blockchain that not only accommodates all her needs for the years to come.
“If you want to build a company or a functionality on a system or a blockchain, you have to make sure that the technology that you’re using is actually working for you—not only today as a proof of concept, but it actually works in one, two or three years when you will have thousands or tens of thousands or millions of transactions in your system. So, you must have scalability. You just must have that. And you must have a system that is stable because you don’t want to rebuild your application or your own system every six months when a couple of developers decide to put a new function in your backend system, like in the blockchain. Of course, like in every business, it has to be cost-efficient,” Nilsson explained.
The very insightful episode was concluded with Nilsson recommending for Jutla to read more about blockchain technology and the companies that operate them. Nilsson stressed the importance of watching the Theory of Bitcoin, a YouTube series featuring conversations between Bitcoin creator Dr. Craig S. Wright and Money Button founder Ryan X. Charles, “where they actually talk about every detail about how it’s not a cryptographic system, it’s not a technical system, it’s all an economic system.”