There may not be an obvious or immediate connection between lab-grown diamonds and cryptocurrencies, other than the cryptocurrency named Bitcoin Diamond (BTCD) which forked off the Bitcoin blockchain in 2017, and the fact that you can use cryptocurrency to pay for jewelry at most reputable jewelers.
However, if we look a little deeper, we can find some surprising evidence of convergent technology. Lab diamonds and cryptocurrencies also have tremendous appeal to Millennials and Generation Z, a market sector that’s coming into its prime for spending.
Not only that, but these groups are climate change aware and demanding of goods and services that minimize negative climate impacts and are socially responsible.
How diamonds are formed
Under pressure, a carbon atom will bond to four others, creating the crystalline structure we know as diamond.
The formation of natural diamonds took place 1-3 billion years ago below the surface in the earth’s upper mantle under conditions of high temperature and pressure. Deep volcanic eruptions then brought them to the surface. This happened very quickly. Once at or near the surface, they then cooled rapidly.
All the natural diamonds already exist, and no new ones are forming. This gives them rarity value.
Despite the energy-intensive manufacturing process, regardless of the method used, growing diamonds in a lab still works out at roughly half the energy per carat compared to mined diamonds. In addition, the process requires a fraction of the amount of water.
The air emissions of mined diamonds are also much higher. Overall, lab-grown diamonds are much more environmentally friendly. The more prominent producers are also moving towards 100% renewable energy sources for their manufacturing laboratories.
Industrial diamonds have been lab-grown for decades, whereas diamonds for jewelry have only become available in the last five years.
There are many places you can buy diamonds with cryptocurrency, most of them online. Jewelry objects are generally high-ticket items. Cryptocurrencies are well-suited for this as the payment transaction fees are low, making it cost-effective for you to buy luxury diamonds with Bitcoin.
Apart from jewelry, there are many industrial uses for diamonds; this is one reason why they’ve been grown for industrial use for so much longer. Some surprising uses are in health, beauty, and many others.
Now that we can manufacture diamonds, we have a reliable, limitless, affordable supply. We’ll inevitably find more uses. There are no reasons for researchers to stop experimenting now that they have assured availability.
There are two different processes available at the moment for producing diamonds in the laboratory, both requiring specialist equipment:
HPHT High pressure and high temperature
This simulates the conditions which formed natural diamonds. The technician seeds a piece of carbon with a tiny diamond, and the crystal grows until they stop the process.
CVD Chemical vapor deposition
This usually takes less than a month. The supply of lab-grown diamonds is limited only by the number of suppliers and how much they produce.
They are much more affordable, costing around 40% less than the natural equivalent. This means you can afford a bigger and better quality diamond. Economies of scale and competition from new manufacturers will force the price down.
Lab grown diamonds are graded in the same way as natural ones. Even an expert needs special equipment to tell the difference. The seller should fully disclose that a diamond was lab-grown as this has a material impact on the resale value. Some makers laser-inscribe this and other details.
50-60% of lab-grown diamonds are made in China, where the energy source is mainly coal. If this is a concern for you, you will want to see all the details about the producer and the grade assessment.
Lab-grown diamonds cost less but have a lower resale value. However, it’s arguable that the actual value is more emotional than price, grade, or quality.
There are already several companies manufacturing diamonds, including De Beers. Still, the Japanese company Pure Diamond Lab included blockchain technology in its processes right from the start, with information on production, refinement, and appraisal stored on the blockchain, increasing transparency and competitive advantage. Apart from this, they used the ICO (Initial Coin Offering) of Pure Diamond Coin (PDC) to fund equipment, research, and development.
Many say that a lab-grown diamond has no resale value, whereas a natural diamond retains at least 50%. This may not be an issue for you, given all the other positives that come with lab diamonds.
Jewelry and Blockchain
DeBeers developed inscribing technology Forevermark with an underlying blockchain technology called Everledger to record the entire value chain of natural diamonds. They now use it for any GIA-certified diamond, whether natural or manufactured, giving consumers transparency and knowledge of their product’s detailed history.
This can also be of great help with insurance, proving ownership, and provenance. In addition, De Beers now has a subsidiary company called Lightbox, which produces lab-grown diamonds. The Pure Diamond Farm in Singapore created the Pure Diamond Coin to raise funds for equipment and R&D at the start of its diamond manufacturing venture.
As both cryptocurrencies and diamonds are of high value, they are a well-suited match. The use of blockchain technology to record the provenance of an item from manufacture through any changes in ownership is sure to provide peace of mind to both purchasers and owners. It will also facilitate any insurance claim, as proof of ownership resides on the blockchain. You can easily use your cryptocurrency to pay for jewelry.