The pandemic caused a significant shift in traditional transactions. Digital transactions surged with the movement restrictions. And cryptocurrencies like Bitcoin became a buzzword. As more crypto buyers increased, merchants were forced to offer it as a payment option.
Microsoft, AT&T, Tesla, Paypal, Twitch, and KFC are just some of the significant companies accepting cryptos. You can also buy your jewels, including diamonds, from merchants like Antwerp Or and Reeds just by using cryptos.
Cryptos are offering more than convenience in buying diamonds. Some buyers highly value privacy and security, especially the anonymity of cryptos. For example, a mystery collector bought a 101-carat pear-shaped diamond valued at $12.3 million. It was paid using cryptocurrency.
More digital-savvy customers like millennials and Gen Z are becoming a significant market segment. And with crypto acceptance as a payment option on the rise, you can easily target these important tech-savvy groups.
But how does the crypto revolution impact the diamond business in 2022?
You Can Buy Diamonds Using Cryptos
Cryptocurrencies can be used as payment for diamonds. And that includes all types of diamonds and jewelry. Thus, even the most expensive one in the store could be bought.
Traditional business transactions still need bank card details in their online payment option. But now that merchants have added crypto as a payment option, it’s not the case.
Cryptos eliminates the need for banks when buying your diamond. Hence, you can avoid keying tons of credit card details. You will also prevent financial information from being exposed or stolen online. You only need a crypto wallet, sufficient units, and the internet to finalize your crypto payment.
However, cryptos are still susceptible to scams and breaches. Thus, you should keep your crypto wallet password safe.
Crypto Assets Backed by Diamond are Available
There has been rising global inflation during the pandemic. Most currencies lost significant values prompting people to seek cryptos to hedge against inflation. Although gold is a widely accepted investment asset and backs many fiat currencies, it lost incredible value too.
Diamond-backed tokens leveraging blockchain are keen on providing alternatives. Diamond gained by 35%, while gold declined by 11% in the same period during the pandemic. With a $1.2 trillion total value, diamonds can be a haven against inflation and volatility.
For example, Diamond Standard is offering diamond-backed tokens on a blockchain platform. More diamond-backed stablecoins may increase in the future to tame the volatility of both fiat currency and other cryptos.
You can buy these diamond stablecoins because their value will increase with time. But it should be at the discretion of your accountant. Besides, you should conduct thorough due diligence on your diamond-backed crypto asset of choice.
Blockchain Improving Transparency of Diamond Origins
Blockchain technology helps in authenticating diamond origins and tracking their transaction history. Advanced and trustworthy provenance assurance is critical in eliminating blood or conflict diamonds.
Blood diamonds kill tons of people, destabilize economies, and destroy the environment. Mining natural diamonds involves detainees, child labor, and illegal practices. The mining operations are also always controlled by forces against legitimate governments.
Some rebel-controlled diamond mining diverts rivers to illegal dams to expose river beds. It affects the overall biodiversity around the river and the whole natural ecosystem.
In short, natural or mined diamonds have a high chance of being linked to conflict. So, purchasing blood diamond jewelry means you’re funding a rebel group somewhere. By extension, you’re endangering the lives of millions of people and the environment.
Blockchain is a transparent and immutable ledger that enhances the tracking of mineral origins and their sustainability. For example, Everledger and Provenance Proof are helping the diamond industry track and evaluate the source of diamond products.
Conscious buyers should therefore ask for the provenance of what they’re buying. Retailers can ensure reliability and brand trust by using blockchain provenance solutions.
Also, you can use it to enforce and track the circular economy of diamonds. Therefore, full history tracking can verify the source and sustainability of natural, recyclable, or lab-grown diamonds.
Benefits of Using Cryptos in the Diamond Market
1. Eliminate Conflict Diamonds
Conflict diamonds are destabilizing mining communities and destroying their environment. The blockchain technology that powers cryptos can empower diamond supply chain tracking. As a result, it can prevent the smuggling of blood diamonds.
Buyers and retailers can therefore avoid blood diamonds and reduce their impacts. With blockchain technology, anyone can authenticate diamonds’ origins. Thus it increases supply chain transparency.
2. Improves Security
Like most luxury goods and gems, all types of diamonds attract premium prices. Diamond jewelry like earring studs, tennis bracelets, etc., is highly-priced. Luxury lifestyles come with scrutiny, and thieves can mark you.
Cryptos can give you the anonymity and security needed to evade such harmful publicity. No one knows the private collector who bought the $12 million diamond through crypto. Besides, no need to walk around with such a vast amount of cash.
3. Convenient Shopping
Like other online shopping, adding crypto payment increases the payment options to choose from. With increased interest in cryptos, adding such a payment option improves buyers shopping convenience.
Payments options are one of the leading reasons for shopping cart abandonment. Providing more payment options like crypto can reduce the rate of shopping cart abandonment. Hence, including crypto payment options can improve customers’ shopping experience and satisfaction with cryptos.
Cryptocurrencies are here to stay. And significant companies that know better have started embracing them. Microsoft, Tesla, KFC, etc., have added them as part of their payment options. Luxury products merchants are joining too. Antwerp OR and Reeds are some of the leading jewelers offering crypto payment options.
But it goes beyond the payment method. The underlying blockchain technology that powers cryptos can help drive fool-proof provenance tracking systems. Leading provenance system providers like Everledger ensure you get sustainable and ethical diamonds.
Finally, crypto-assets backed by diamonds are emerging, with Diamond Standard leading the pack. You can use it to hedge against the ever-rising global inflation that undervalues fiat currencies. However, you should be discrete and conduct thorough research before investing in any crypto asset.