Blockchain for coloured gemstones

A Blockchain for coloured gemstones

The Gübelin Gem Lab is proud to be partnering with Everledger, a leading global emerging technology enterprise, to build the first Provenance Proof Blockchain for coloured gemstones. The project aims to provide a digital, decentralised ledger, based on blockchain technology that tracks gemstones from mine to end-consumer.

If you already have an account for the blockchain, you can log in here.

Why are transparency and traceability important?

Companies in the jewellery industry face mounting scrutiny when it comes to the sourcing of their raw materials, and gemstones in particular. Today's consumers are more informed and expect transparency on the value, background and context of their purchase.

However, providing transparency throughout the jewellery value chain is proving extremely difficult, as the supply chain is long, fragmented and complex. The current system is based on trust or in some cases lengthy paper-trails.

This latest project is part of a growing array of technological ventures, launched with the Emerald Paternity Test in March 2017 to bring more transparency to the gemstone industry.

What is the technology behind the project?

Blockchain is a technology that is revolutionising transactions. It digitally records individual peer-to-peer transactions, creating a virtual ledger secured through cryptography, which is distributed and accessible to each participant.

The main benefits of this digital ledger are transparency, security and speed.

This makes blockchain technology an incredibly interesting tool for improving tracking throughout the supply chain. Applied to the gemstone industry, this digital ledger can offer a permanent, tamper-proof record that traces a gemstone’s individual journey, from the mine to the end-consumer and even beyond.

To design and build the required technical backbone of the new Provenance Proof Blockchain for coloured gemstones, Gübelin Gem Lab has partnered with Everledger, a leading expert in tracking the provenance of high-value assets using blockchain technology.

How does it work?

Blockchain technology works as follows: Whenever a transaction occurs, it is validated within the ecosystem of the so called blockchain. Once verified, a transaction is recorded as a digital block, containing the key of the previous entry, a timestamp and the transaction data, all secured through cryptography. Any further transaction is secured in the same way by creating a new block with a new key which then is linked to the previous block. This creates a chain of individual transactions that can be traced back to the original. These blocks become part of a digital ledger, which is continuously distributed to all participants.

 This concept of distribution and verification is considered to be resistant to data loss, modification or fraud.

The Provenance Proof Blockchain project focuses on building a platform that uses this process to create a digital ledger tracing a gemstone's particular journey. Every step or transaction within the value adding process of a particular gemstone will be recorded within this digital ledger. At any stage, only the party who physically holds the gemstone will be permitted to consult its past hisotry and add a new chapter to it. 

Any stakeholder, such as miner, wholesaler, jeweller, cutter or gem lab will be able to join the blockchain easily and in most cases for free with a simple one-time online registration. In principal only an internet access via smartphone or PC and very basic gemmological tools such as a scale and measuring devices are required. 

However, despite its trait of being immutable, and ensuring the integrity of its data, it is advised to deploy other technologies to complement a digital tracking and tracing solution. One such solution is our Emerald Paternity Test.

Frequently Asked Questions

  • Does this technology make sure the stone is indeed the one described in the blockchain?

    Blockchain technology is built to ensure the integrity of the data that is entered. The encrypted and decentralized nature of the blockchain minimizes the risk of an unauthorised change of blockchain data, and will trigger a halt of the respective chain in the event of an attempt to tamper data.
    However, blockchain technology can control the integrity of the data, but not its veracity and authenticity. Blockchain technology alone cannot make sure that the stone described in the blockchain as being mined responsibly is indeed mined responsibly. It cannot guarantee that the Colombian emerald described in the ledger is indeed from Colombia, or even that it is a true emerald. Equally, a stone could get swapped along its way from the mine to the end consumer, a process that would get completely unnoticed by the digital logbook that travels alongside the stone.
    Hence, we have to manage our expectation regarding the capability of blockchain technology to ensure the integrity of the stone. Nevertheless, the blockchain adds confidence to your purchase. The transparency granted to the supply chain will make it more difficult for fraudsters in the long run, as they leave a pattern that can be traced, and the cheater can be identified.
    A more immediate and robust way to get confidence in the integrity and authenticity of a stone is to combine the digital tracking of the blockchain with a physical tracer. Physical tracers containing provenance-specific information, are inserted into or attached to a rough crystal at the source, and remain with the stone all along the value chain and throughout their lifetime. The Emerald Paternity Test (see website) is one example of such a physical tracer, and how it perfectly complements the digital track of the blockchain, boosting its resistance against an undisclosed alteration or swap of stones.

  • How is Provenance Proof checking the legitimacy of its participants?

    Provenance Proof Blockchain is an open platform that welcomes everyone who embraces the value of transparency, and accepts the terms of use. However, we have the obligation to check the legitimacy of the companies and individuals that are using this platform, i.e. perform certain KYC checks, that are standard in the industry. This legitimacy check basically comprises of a background inquiry that aims to identify counterparties that might have a problematic track record, i.e. that are mentioned in sanction, watch, regulatory, and law enforcement lists. The background check applied for Provenance Proof taps several hundreds of public records, on a local, national and international level.
    Once the background check is passed, and after having signed the Code of Conduct and the Terms & Conditions, the new participant is a registered user of the Provenance Proof Blockchain and can start using its services

  • Is the data I enter in Blockchain visible for everyone?

    No. Access is granted to everyone who accepts the terms, but visibility into the history of a specific stone is granted only to those who own the stone, or who have the stone in their custody. This visibility is only granted during the time this specific gemstone is in their ownership or custodianship. Once the stone is passed on to a next stakeholder, also the exclusive right to see the existing blockchain data is handed over to this person or company, as well as the permission to write the next chapter in the diary of that specific gemstone.

  • Can Gübelin Gem Lab & Gübelin AG see my data?

    The Gübelin Gem Lab is merely one possible stakeholder along the journey of a gemstone, such as the miner, the cutter or the jeweller. The Gübelin Gem Lab or Gübelin Jewellery have no privileged insight into the data of the blockchain.

  • Can Everledger see my data?

    Everledger has provided us with the report of an independent audit company that has scrutinized the source code of Everledger and the underlying Hyperledger operating system. This report confirms that no backdoor access exists and that no unauthorized party can access the information contained in the Provenance Proof blockchain. 

  • Are the prices and values of the gemstones visible in the blockchain?

    No, the Provenance Proof Blockchain does not show any values or prices.

  • Can I see who finally bought my stone?

    The main purpose of the Provenance Proof Blockchain is to provide transparency for the final customer into the personal history of a gemstone from its source to the final jewellery. This requires visibility upstream the value chain, back in time, from the retailer/jewellery back to the wholesaler, the cutter, and finally to the mine. Possible other involved parties such as dealers, gem labs, or treaters are also made visible. However, the visibility is only granted to the owner of stone at the time of having the stone in his/her ownership or custody. Once a gemstone has been transferred to a next owner, one also transfers the access to the blockchain, contributing new data and seeing existing data. Downstream visibility is not granted at any level.

  • Which stones can be put on the Provenance Proof Blockchain?

    The Provenance Proof Blockchain is built for any type for gemstones and pearls. There are no restrictions regarding the type of gemstones. Stones can enter the blockchain either as lots or as individual stones.

  • What do I have to do to join the Provenance Proof Blockchain?

    The Provenance Proof Blockchain is easy to join for any type and any size of stakeholder. The registration process, and the entering and reading of data is equally simple, only requiring a smartphone. While the minimum set of data required to register is very basic, i.e. not more than a name and a location, more complete information allows a company to demonstrate the contribution and value that they add to a product. For large companies, the option exists to develop custom-built interfaces with their databases and ERP systems, facilitating an automated and efficient data feed in the Provenance Proof Blockchain.
    Integral part of the registration process is a Code of Conduct that every user has to agree to work in compliance with. It obliges the users of the blockchain to stick to certain rules, such as being honest and complete about the nature, provenance and properties of the stones they put on the blockchain, and about the identity, values and standards they pursue and comply with as a company. Furthermore, every company and individual that completes the registration process is subject to a background check (see below for details).

  • How much does it cost to use the Provenance Proof Blockchain?

    The Provenance Proof Blockchain as a matter of principle is free of charge. The registration process, the contribution of data, and the access to data is not linked to any charges whatsoever, whether one-time or recurring. This is enabled by the vision and commitment of the Gübelin family to offer a solution to the industry that gives the end-consumers the transparency that they expect. Thanks to the Gübelin family’s generosity, we can offer the Provenance Proof Blockchain to everyone in the industry to use it without getting any invoice, regardless of the amount of stones and the amount of data that are put on the Blockchain.

  • Is this technology also suitable for small members of the industry?

    The Provenance Proof Blockchain has been designed and built to also cater the needs of small-scale participants of the gemstone and jewellery industry. When building the user interfaces, we had the artisanal miners, the small-scale mining cooperatives, small-scale dealers, and independent designer and retailers in mind. Using only a smartphone and online access, the Provenance Proof Blockchain can be used in its full functionality also in remote areas.

  • What happens if I do not pass on the hash to the buyer of my stone?

    Passing a gemstone to a next owner without passing the hash/blockchain is interrupting the chain. The blockchain comes to an end, and the trackable, verifiable history of the stone is not maintained. This means losing value for the new owner and all subsequent owners. We though do offer the option to re-link the blockchain to the stone again. Nevertheless, the break will be documented.

  • What is the advantage of a Blockchain over paper trail?

    The Provenance Proof Blockchain is based on a decentralized ledger, meaning that the same information is multiplied on a number of different computers all over the world. Any new entry that is made on a stone is checked for its legitimacy before being entered in the ledger. Sophisticated algorithms check that the new data is not conflicting with any existing data, and that the person entering it indeed is authorised to undertake that task. The advantages over paper trail is that it is more convenient, and less prone to tampering with the data.

  • Blockchains are said to consume huge amounts of energy, leaving a massive ecologic footprint. How big is the footprint of the Provenance Proof Blockchain?

    Blockchains are coming under public scrutiny for the amount of energy they consume. Indeed this criticism refers mainly to the immense energy that is required to mine new crypto currencies such as bitcoins which are based on the proof-of-work concept. The Provenance Proof Blockchain as a permission-based decentralized ledger used for tracking goods and without any integrated crypto currency requires only a fraction of the energy for data handling compared to crypto currency mining.

  • Is the use of Provenance Proof Blockchain linked to any traditional Gübelin Gem Lab services?

    No. The access to the Provenance Proof Blockchain, as well as other Provenance Proof services such as the Emerald Paternity Test, is not attached to any services of the Gübelin Gem Lab or any other Gübelin business. No strings attached.

  • Is the use of Provenance Proof Blockchain linked to the Emerald Paternity Test?

    The Provenance Proof Blockchain and the Emerald Paternity Test are individual services offered under the Provenance Proof brand. The Blockchain is a platform that can be used for any type of gemstone. The Emerald Paternity Test is a technology that is – at least for the time being – applicable on emeralds. The combination of the physical tracer of the Emerald Paternity Test with the digital tracking of the Blockchain gives the highest and most trustworthy level of transparency. Hence, wherever possible, it is highly recommended to apply the Provenance Proof Blockchain and Emerald Paternity Test in combination. For all other stones, the Provenance Proof Blockchain is used as a stand-alone service.

  • Can I use the Blockchain only for stones that contain the physical tracer of the Emerald Paternity Test?

    No. The Blockchain can be used for any type of gemstones, coloured gemstones, diamonds, pearls, single and lots, rough and cut, loose and mounted. The presence of a physical tracer has no influence on the usage of the blockchain.

What the press says about the Provenance Proof Blockchain for coloured gemstones

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