You may be using blockchain to trade with cryptos, energy, buy goods, check the origins of the things you buy and so forth. From now on, diamonds have joined the blockchain for the first time as non-fungible items. Diamonds may be forever and investing in them may be the life changing decision. Now, each diamond’s unique features are recognized and valued. Moreover, tokenized diamonds on Ethereum blockchain are controlled by the users.
Jacques Voorhees and NFTs
Jacques Vorhees is the founder and CEO of “Icecap”, the company that manages tokenized diamonds on Ethereum blockchain. According to his predictions, diamonds would soon be available for trading as NFTs.
The previous time a company tried to successfully tokenize diamonds was in 2018. Back then, Russian company Alrosa, the world’s largest diamond mining firm, teamed up with blockchain platform Everledger. The aim was to make diamond supply chain more transparent and enhance the user’s confidence people. The way they did it was through providing the info on origin, features and ownership history.
However, “Icecap” apparently announced a step further. They believe that it is not logical to expect success in creating fungibility with non-fungible items.
What is NFT?
NFT stands for “non-fungible tokens”. You may have heard about this term being used for the in-game assets. These are the items that people can trade with on third-party markets without the permission of the game developer. Non-fungible means, among other things, that these items are not identical, but each one is unique in a way. And we know that each diamond is unique and special.
People use NFTs to create digital ownership that is verifiable. Moreover, these tokens are interoperable across platforms, which makes the trade more comfortable. You can find NFTs in the application of digital protection of rare art, crypto-collectibles, etc.
How Do the Diamonds Fit into Picture?
In order to create a digital representation of an actual diamond, someone needs to certify the authenticity. That someone is the Gem Certification & Assurance Lab (GCal). According to Eric Voorhees:
“So if it’s ever found that their grading was not accurate, they will pay the difference in price and then they back that up with an actual insurance policy that covers them in case they have to pay out on that.”
“Icecap” is the company that, as they say, gives diamonds their own digital tokens, or their digital representation if you wish. Those tokens are unique, and they represent the rights to a specific diamond. At the same time, each diamond would act as a tradeable asset.
Once the diamonds get their digital representation in a form of tokens, they become liquid. Users can keep them in a secure vault, redeem them or try to sell them on crypto-exchanges.
Is it Legal?
According to the “Icecap” CEO, who purportedly claimed that he consulted with the attorneys, there should not be any regulatory breaches:
“They’ve looked closely at what we’re doing and exactly how we’re handling the title transfer and how we’re handling the collection of sales tax issues like this. They’ve asked a lot of questions. Their conclusion is that it seems that there’s no regulatory issue right now.”
Who Is the Interested Party?
It is apparently difficult for retailers to sell diamonds without a discount. Voorhees believes this project of tokenized diamonds is a “$10 billion opportunity” which would initially be explored by a niche market user, as reported by Cointelegraph.com.
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