The World’s Blood Diamond Watchdog Is Looking to the Blockchain

By August 31, 2016Bitcoin Business

World leaders have been working together to eliminate the global market in blood diamonds—stones that fuel violent conflicts through their sale— for over a decade , but they continue to be bought and sold. Now, the Kimberley Process (KP), an international organization that oversees the diamond trade, is hoping that the technology behind bitcoin, the blockchain, can plug the leaks. But as many critics have noted over the years, the Process has many serious problems of its own that might not be solved by new technology. Fake diamond certificates have been used to set up advance-fee scams The bitcoin blockchain is an internet-based bookkeeping system. Whenever a transaction is made, it gets placed in a “block” of data and included in an ever-growing chain, which is continually downloaded onto every bitcoin user’s computer. The blockchain is publicly viewable, meaning that it’s not only extremely transparent, but can never be altered. Users can also add text to bitcoin transactions—in the case of the diamond trade, this might be a certificate guaranteeing that a specific shipment is conflict-free—which becomes part of the blockchain’s public and unchangeable record. A new report from KP notes that implementing blockchain technology would “help to eradicate false KP certificates and reduce the impact of human error while uploading data significantly.” The report also states that the current KP chair, Ahmed Bin Sulayem of the United Arab Emirates, “engaged with blockchain technology providers to adapt this technology” to the diamond trade, suggesting they’re taking this seriously. The KP works through a so-called “system of warranties,” whereby every government must provide a written guarantee that shipped gems aren’t involved in funding conflict. The 81 participating countries, which account for roughly 99 percent of the world diamond trade, also only deal with each other. (In Canada, most of the […]

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