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Blockchain technology is coming to the jewelry industry, and it’s coming fast.
Ultimately, this means absolute trace-ability of every element in the jewelry supply chain; from the mine, to the refinery, to the alloy manufacturer, to the production company, the retailer, and on to the consumer. But we’re still years from that level of supply chain cooperation. You may have heard of blockchain technology as the technology behind internet currencies like Bitcoin. But blockchain can be used to track any virtual or physical good from one place to another, as long as all the participants in the chain-of-custody have access to a blockchain platform, and reliably enter their transactions into it. This type of supply chain transparency will go a long way to reassuring consumers concerned about the jewelry industry's impact on the world, and will be a huge relief to jewelry businesses everywhere that are struggling to buy and manufacture responsibly.
How Does Blockchain Work?
So how does it work? If you’ve ever watched a police procedural television show, you’ve seen how evidence is passed from hand-to-hand, carefully recording each person who touches it along the way. Evidence is bagged, tagged, and signed off on at each step, to preserve the integrity of the evidence from collection to trial.
That’s what blockchain does. It tracks raw materials — like gold or diamonds — from the mine, to the refiner (for metals) or gem cutter, through distributors and manufacturers, to the retailer, and on to the consumer. Only, instead of keeping a paper log, the raw material is assigned a serial number, and data is entered into the supply log, or digital ledger, as it moves from place to place, throughout the material’s transformation. Blockchain systems cannot be edited and they are extremely secure, so the data that is entered for each step of the process is permanent.
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