Diamond Standard Releases a Fungible Diamond Commodity Backed by Real Gems via Blockchain
The one-year-old startup, Diamond Standard Co. has finally done something which previously was thought to be impossible.
Diamond Standard Co. which is a founding member of Diamond Standard Exchange, has unveiled the globe's first blockchain-powered token-a universal asset for securing any digital transaction.
Diamonds Now As Attractive As Gold
Institutional investors may now start to have a look away from gold as diamonds are being made attractive to match the gold standards.
Like gold, diamonds are as well a valuable natural resource only that they are unusable by investors. Unlike gold, the price of the diamond is negotiable because each piece is different hence making it difficult to standardize them into some form of exchange.
However, Diamond Standard is looking to trade diamonds in standardized “bars” just like gold. The solution is basically combining a hardware solution with a blockchain twist.
Explaining the concept, Cormac Kinney, founder and CEO of Diamond Standard Co. states that a diamond commodity was created through grouping sets of diamonds in a fair and transparent way. The sets created are fungible and each diamond independently certified and sourced via a regulated exchange.
But who's the mastermind behind the new commodity?
According to Kinney, arriving at the new product was only possible because of blockchain which provides a permanent public record for each geological contents as well as provenance which enable remote auditing and the transactions.
The Process is Easy
With the introduction of standardization and fungibility, the startup is certain that diamonds will have a similar weight as gold in the eyes of institutional investors.
The diamonds are sealed in resin – a Diamond Standard Bar or Diamond Standard Coin which contains a military wireless encryption chip. The commodity is delivered to their custodian or buyer where they can be verified.
The chip stores Bitcarbon-a blockchain token that is instantly authenticated as well as can be remotely audited. Therefore, users don't need to risk carrying them for trade, but instead, they can trade the bars on the Diamond Standard exchange.
Furthermore, owners will be able to hold the commodity themselves or use a custodian that charges $2 each month to custody as well as ensure a Diamond Standard Coin. The Diamond Standard Coins is calibrated to value an initial $10, 000.
Custodians store the product in smart cabinets that audit them regularly and then owners can transact them remotely by use of the Bitcarbon token. Only the owner has the digital key. For each transaction, there's a proof-of-asset.
The Diamond Standard Coin is to have a daily market price as well as trade on global exchanges through transacting the Bitcarbon token on the blockchain. Also, the token can be used to borrow money or asset-back smart contracts by using it as collateral.