For The Gem Industry, The Trusted Expert Is Not Obsolete Yet

By Alexia Palmer

A trainer I had on the Gemological Institute of America as soon as likened gemology to an arms race. Dishonest people, he instructed us, are consistently inventing new synthetics, remedies, and substitutes whereas gemologists should consistently devise new methods to detect them with out inflicting bodily harm to a stone. We, as gemology college students, had been coaching to assist struggle these worldwide forces of evil!

Heroics apart, the jewellery trade is one which has all the time been closely depending on experience and belief. In a world the place most customers lack the coaching to confirm the identification and high quality of the gems they purchase, grading companies, jewelers, and commerce organizations have supplied the buyer confidence essential to maintain the trade operating. As the general public grows more and more involved about questions of provenance and sustainability, reliance on these authorities has additionally grown.

During the last a number of years, an increasing number of grading companies and gemstone firms have introduced forays into the realm of blockchain know-how. The Gemological Institute of America now gives blockchain-enabled diamond grading reports, De Beers has unveiled a blockchain known as Tracr, Everledger has partnered with Gübelin Gem Lab to create the Provenance Proof Blockchain and IBM has launched the TrustChain Initiative with cooperation from Rio Tinto. How does blockchain know-how apply to gemstone tracing? Does it promise decentralization in the identical approach it does for the banking trade?

During the last a number of years, an increasing number of grading companies and gemstone firms have introduced forays into the realm of blockchain know-how.

Gem laboratories equivalent to these run by GIA and Gübelin take submitted gems and topic them to testing and inspection. They then concern gem stories that embody options equivalent to gem identification, weight, dimensions, form, lower and readability grades, shade, fluorescence, geographical origin, and plots of inside options. Every report has a novel quantity, and this quantity may be laser inscribed right into a stone to assist in future identification. Within the case of the GIA, gem stories can be found to the general public upon request as PDFs on the institute’s web site for verification functions.

Different grading companies might require identification verification earlier than releasing this data. A buyer can carry a stone to a skilled gemologist to verify whether or not its options match these in its designated gem report. A laser inscription quantity is useful however may be faked, eliminated by sharpening or obscured by a jewellery mounting, so it’s best to verify a match utilizing numerous completely different options. The interior plot is probably the most distinctive and dependable of those within the case of diamonds. Clients have realized to ask for gem stories once they purchase gems, and the apply of utilizing impartial grading laboratories is widespread all through the trade.

The blockchain options at the moment being utilized to gemstone tracing use ledgers which are proprietary to a selected firm or consortium to indelibly document a person stone’s historical past because it modifications fingers, ranging from the time it’s first entered. The ledger can accommodate modifications to a stone over time, equivalent to reducing or the usage of shade or readability remedies. So long as these alterations are faithfully recorded they are going to stay a part of a stone’s historical past. The know-how’s potential for tracing a stone from the mine by way of sellers, processors, retailers, finish customers and eventual resale is very promising.

This extends to gadgets that could be stolen or fraudulently represented. The Kimberley Process Certification Scheme, a protocol launched in 2003 to doc the nation of origin for gems in an try to forestall the trafficking of stones from battle areas, will depend on a big quantity of bodily paperwork; in consequence, it has been extensively criticized for its vulnerability to fraud and forgery. The Scheme may benefit vastly from the usage of fastened digital record-keeping, and it was extensively reported to be exploring blockchain know-how as early as 2016.

The know-how’s potential for tracing a stone from the mine by way of sellers, processors, retailers, finish customers, and eventual resale is very promising.

Will blockchain know-how disrupt the gem trade? Whereas distributed ledgers present actual potential for improved transparency and record-keeping they don’t seem to be on the verge of toppling current constructions or making gemologists out of date. Since gems are bodily objects it would all the time be essential to carry out bodily examinations, first, earlier than they’re entered into the blockchain and, subsequently, every time they must be matched again to the blockchain information. The fungibility of foreign money, commodities and equities makes it potential to chop out the intermediary and switch them instantly from individual to individual in a trustless method. With property equivalent to gems, bodily artistic endeavors, vehicles or actual property the digital object corresponds with or “mirrors” a bodily object.

For the latter use case, it’s crucial to make use of a permissioned ledger wherein some authority will all the time be wanted to make sure that data added to the blockchain matches the true object. A governing consortium (such because the GIA) would run the blockchain, specialists (equivalent to skilled gemologists) could be required to enter new information, and lesser specialists (equivalent to skilled gemologists) could be required to assist finish customers confirm that their gems correspond to the digital variations. In mild of this, it’s not shocking that almost all firms making use of blockchain know-how to the gem trade are established gamers. The know-how is a supplemental innovation somewhat than a disruptive one.

Latest improvements in marking gems embody RFID tags inside cultured pearl nuclei, laser inscribed QR codes, and even DNA technology-based emerald “Paternity Exams,” however these all require microscopes or different specialised tools to work. Until a foolproof approach is discovered for a layperson to uniquely determine a gemstone, gemology college students like me and my classmates will proceed to play an necessary position in stopping fraud.

Alexia Palmer (’22) is at the moment an MBA scholar at Columbia Enterprise Faculty. Beforehand she labored within the jewellery trade for eight years as a gemologist, jewellery appraiser, and jewellery historian. She has a Masters diploma in Visible Tradition: Costume Research from NYU Steinhardt, a Graduate Gemologist diploma from the Gemological Institute of America, and a certificates in Appraisal Research from the Appraisers Affiliation of America.