VANCOUVER: Lucara Diamond, a Canadian firm, has announced its acquisition of a blockchain platform with the potential to match rough diamond production with polished demand, as an industry that has long struggled with traceability suggests where blockchain could help others.
On Sunday, Lucara revealed that it had bought the digital platform, Clara Diamond Solutions, for around $29m in stock. According to a statement from Lucara, the newly acquired platform “integrates with blockchain technology, ensuring provenance tracking across the entire diamond supply chain,” in addition to eliminating the dependency on a fixed sales cycle.
“We believe that Clara will not only modernise the entire diamond sales process but unlock additional value for all participants across the diamond market,” Lukas Lundin, chairman of Lucara said in comments reported by the Financial Times.
Blockchain is a shared, continuously updated, chronologically ordered database in which each individual record – ‘block’ – is distributed across a network with a timestamp and link to the previous block.
Lucara isn’t the first diamond supplier to bet on blockchain. In January, De Beers, the world’s largest supplier, invested in a blockchain system that would trace the product’s route through the value chain.
“Consumers should be able to know there is an accurate register of a diamond’s journey that provides assurance of its provenance and authenticity,” Bruce Cleaver, CEO of the company told the FT. For these firms, guarantees that their stones do not come from conflict zones where they could be used to finance violence is paramount to maintaining consumer confidence.
While most examples of blockchain are in their relative infancy, the ledger – by nature of its distribution – is able to create a transparent supply chain, important to many key industries. Advertising too has heard of the technology’s potential to clean up the murky digital media supply chain.
New agencies, such as Truth, which launched last November touting its status as “the first block-chain enabled global media agency, promise to change this.
“Right now, once you hand the money over to agencies, as a client you don’t know what happens. You might get a reconciliation statement but there’s no way to verify”, Mary Keane-Dawson, Global CEO for Performance Media at TMG, told the Drum.
With blockchain, however, “every transaction is recorded by the ledger which verifies individually that transaction against the rules you set up,” she said.
Problems, however, persist with the technology. Transaction speeds are slow, and the industry has not yet agreed on a universal currency that would allow a standard to emerge. Though the story tends to play out in hype, the example of other industries grappling with their own murky supply chains could supply a blueprint for digital media’s future.
Sourced from Lucara, Financial Times, Reuters, The Drum; additional content by WARC staff