Driving the Internet of Value for Diamonds

Asia Blockchain Review

September 21, 2019

Asia Blockchain Review recently spoke to Jim Duffy, CEO of Tracr, a company that is connecting the diamond industry by establishing provenance, authenticity, and traceability throughout the entire value chain. Duffy talked about the Tracr’s mission, working with major players in the diamond industry, the importance of the Tracr Community, and the company’s roadmap going forward.

Asia Blockchain Review: Can you tell us about the mission and long-term goals of Tracr? 

Jim Duffy: Our mission here at Tracr is to connect the diamond industry supply chain through a common digital platform. We want Tracr to benefit all businesses in the diamond industry, from large producers to small, family-owned businesses in multiple ways: 

  • Having a common digital infrastructure for the entire diamond industry will enhance efficiencies between businesses. 
  • As Tracr is created from within the diamond industry, it ensures that industry needs are met and that value is preserved within the industry. 
  • Last but not least, the idea is for this common digital infrastructure to be the bedrock and foundation for a robust application ecosystem that will create additional sources of value for the diamond industry.

ABR: Why has Tracr chosen to enter the diamond industry? What was the inspiration for founding Tracr?

JD: Tracr was originally founded by leading diamond producer De Beers Group in 2018 as a way to address consumers’ expectations when it comes to diamond provenance. We have been seeing a growing demand for more information about where products come from, not just within the diamond industry, but also in other supply chains. With Tracr’s help, the diamond industry is now able to enhance consumer confidence in natural diamonds by ensuring traceability, provenance, and authenticity throughout the entire supply chain.

The other inspiration behind Tracr is timing related. Why now? We are entering a new phase of evolution of the industry, usually referred to as Industry 4.0. In every area of our lives, we are moving from the digital, computer-controlled world (which characterized Industry 3.0) to efficiently connected systems. This move is blurring the line even more between the physical and digital. 

In this context, the diamond industry is reshaping itself to meet the needs of its stakeholders and is putting information technology at the forefront of its evolution. Tracr uses these advancements to connect the diamond supply chain, but the technologies and concepts we use could be translated to address other supply chains in the future.

 

ABR: What are some of the issues that Tracr have faced and how did you overcome them?

JD: The main challenge we have been facing is education around technologies. It’s a mammoth task to educate a whole industry on the concepts and the business benefits these technologies have to offer to their particular organization (e.g. optimized processes, bringing new value into the industry, etc.). 

To help overcome that, we recently launched the Tracr Community to engage with our participants and the wider diamond industry. As part of this community-building initiative, we launched the Tracr Community web portal.

The portal is where we engage with our participants on an ongoing basis by, for example, organizing quarterly updates and ensuring that we communicate our latest milestones.

The online community also hosts a knowledge hub for all Tracr-related subjects and helps us share technical requirements and best practices when it comes to the onboarding process. This is important to stakeholders in the diamond industry because it allows for seamless integration with the Tracr Platform.  

ABR: Can you tell us about your partnership with major players in the diamond industry such as Signet and Chow Tai Fook?

JD: Of course. We have been in great company since the beginning, collaborating with a number of businesses as a part of our pilot phase to identify the challenges and needs of the diamond industry and make sure we build the most relevant platform for the whole industry. We are very happy to be working with Signet Jewelers and Chow Tai Fook Jewellery Group, two of the world’s leading retailers of diamond jewelry. Alrosa, one of the world’s leading diamond producers, also joined the Tracr pilot last year. 

These participants, along with the manufacturers we have been working with, all give us different industry perspectives, from both a geographical and a supply chain standpoint. All of these are invaluable insights without which we wouldn’t be where we are today, so we are immensely grateful for these wonderful relationships we have built along the way.

 

ABR: Can you share with us your roadmap for 2019-2020?

JD: We are in a very exciting phase right now, as interest from the diamond industry around traceability and Tracr itself is growing. With our pilot program being a success, we are now looking to welcome more participants and scale-up. We, of course, continue to collaborate closely with our current participants as we migrate to the industry-grade beta platform that will be officially launching later this year. At that point, we will be ready for mass adoption, positioning the Tracr Platform to be a common digital infrastructure for the diamond industry. 

This opens many doors for businesses in and around the industry to build applications on top of the Tracr Platform and add new sources of value to the supply chain. These could range from business-to-business (B2B) apps to help increase efficiencies throughout the value chain to consumer-facing applications that aim to meet customers’ expectations to know more about the products that they buy, including the journey it took on its way to its current state. The possibilities are endless, and we can’t wait for what’s to come!

ABR: What is the ‘Internet of Value’ according to Tracr?

JD: We talked about Industry 4.0 earlier, and the ‘Internet of Value’, along with the emergence of digital assets — digital representation of physical products — is a big part of it. The ‘Internet of Value’ is also seen as the third generation of the Internet and is the main evolution that allows us to transfer value along the supply chain and drive a more efficient industry. 

But let’s take a step back and start from the beginning with the first generation of the Internet mass interconnectivity in the 90’s. Mail became email and commerce became e-commerce, but we essentially dealt with the same people and businesses; we just did so online. 

The second generation of the Internet saw the emergence of a network of networks in the form of mobile and social networks. In this version, our presence online grew exponentially, and for the first time, we see a reduction in the degrees of separation. We were all suddenly more connected to more people and businesses, as evidenced on social networks such as LinkedIn. 

The third generation (Web 3.0), however, pushes the boundaries even further and allows us to trade and exchange value as quickly as we communicate and exchange information. Web 3.0 also allows the secure exchange of assets by linking the ownership of a physical asset to its digital form. These digital assets can then be transferred to anyone in the network — a true peer-to-peer (P2P) transaction.

The way we have approached this at Tracr is by relying on four technical competencies that in concert make this an Internet of Value platform:

  • Security & Privacy. Tracr values the diamond industry’s data and digital assets in the same way the diamond industry value the physical diamonds they represent. As a result, we go to great lengths to ensure the data on the platform is secure and has fine-grained privacy controls.
  • We rely on the Internet of Things (IoT) devices to connect the physical and digital worlds by scanning and capturing specific diamond data points at different stages of the supply chain.
  • Our third technology is Artificial Intelligence (AI), which is used to automate the process of decision making. This is so the ever-growing data sets collated can be analyzed in a fast and reliable way.
  • The fourth one is the Distributed Ledger Technology, which is used to create digital assets that represent their counterparts in the physical world. The Distributed Ledger is also where those digital assets are appended and transferred securely, ensuring that the visibility of provenance, traceability, and authenticity is achieved.

 

ABR: How is blockchain technology transforming the diamond industry?

JD: Blockchain is definitely one of the multiple technologies that have been essential to facilitating a connected diamond industry and a more digitally connected supply chain. However, it is key to note blockchain must work in concert with other technologies to prevent the ‘garbage in/garbage out’ problem others are facing. 

This is why at Tracr, we’re focusing first and foremost on ensuring that the data we are storing on the blockchain is accurate. This is where our other technologies mentioned previously come into play: IoT devices and AI allow us to execute diamond traceability with great confidence. We use blockchain for what it does best: the creation and storage of digital assets. Using blockchain to manage data helps us create a digital trail for each diamond on our platform and achieve end-to-end traceability.


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Asia Blockchain Review

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Asia Blockchain Review is the largest initiative for media and community building in Asia for blockchain technology. We aim to connect all blockchain enthusiasts on a regional scale and facilitate the technological foundation of blockchain through a range of group discussions, technical workshops, conferences, and consulting programs.

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