In this episode, host Charles Miller talks about the potential use of blockchain technology in the gold and diamond jewelry industry with founder and CEO of the Norway-based enterprise blockchain platform UNISOT Stephan Nilsson and co-founder and CEO of London-based online jewelry platform MarketOrders Sukhi Jutla.
UNISOT has already developed a working platform built on the Bitcoin SV blockchain for the Norwegian fish industry supply chain, while Julta is currently trying to develop their own blockchain-based application that will provide trust and transparency to the precious metals and gems supply chain. Although from very different industries, the two CEOs agree that blockchain technology can be used to improve supply chain management as a whole by minimizing cost in transaction fees and problems encountered in dealing with numerous middlemen, such as delays and fraud.
“In our industry, we are dealing with very high-value precious products that are typically sourced from one area or one country, you know, like a gold mine in Africa. And then that raw product is sent to another country where it’s processed. And then it’s moved to another destination where it’s designed. And then it’s moved on to another destination where it’s eventually sold. So, the products that are being moved across in my industry have many, many third parties and middlemen. And so, there’s a lot of processing that’s happening. But I don’t feel that there’s always that level of transparency. And I myself have had instances where I have ordered products from an international country such as Hong Kong or Singapore, but when it reached the destination, such as the UK, the products had actually been opened and some items have been swapped out for lower quality products…. And who was to blame for this? It’s because the supply chain process wasn’t as transparent as could be,” Jutla explained.
Jutla elaborated that there are two main functions her company is hoping to achieve in its own blockchain-based platform: implementing a tokenized payment system to cut down on transaction costs and payment delays and adding a nano-chip identifier, such as an RFID, to all pieces of jewelry that will enable them to track their products, as well as ensure their authenticity. Jutla shares her company is planning to marry blockchain technology with the second function in that the nano-chip should have the ability to alert the blockchain about its location, as well as if something were to happen to the jewelry, like if the gold were to be melted so it can be resold.
When asked to give Jutla some advice on how to go about developing her own blockchain-based application, which UNISOT has already done with its seafood supply chain, Nilsson recommended for the jewelry CEO to look for a blockchain that can scale and has a stable protocol.
“If you want to build a company or a functionality on a system or a blockchain, you have to make sure that the technology that you’re using is actually working for you—not only today as a proof of concept, but it actually works in one, two or three years when you will have thousands or tens of thousands or millions of transactions in your system. So, you must have scalability. You just must have that. And you must have a system that is stable because you don’t want to rebuild your application or your own system every six months when a couple of developers decide to put a new function in your backend system, like in the blockchain. Of course, like in every business, it has to be cost-efficient,” Nilsson advised.
Bitcoin SV is currently the only blockchain technology that has all of the qualities and functionality Nilsson enumerated. It's clearly the smartest option for those financially and technologically educated.
