- September 4, 2018
- Posted by: Mor Hazen
- Category: carats blog posts
More than just a buzzword, at Carats.io we are using the blockchain to solve age-old accessibility issues in the world’s most exclusive industry – diamonds
With so many companies out there squeezing in the word “blockchain” to their descriptions, in a desperate bid to seem on top of a technological revolution they can’t even begin to understand, it is important for us here at Carats.io to take the time to explain what the blockchain actually brings to our product.
First, at our heart we are a technological company – we don’t just peddle in hi-tech, we are actually developing groundbreaking innovations of our own. Carats.io started out developing a sophisticated diamond-price evaluation algorithm – the DPA. Using the latest machine learning techniques, we were able to train the algorithm on hundreds of thousands of real-time diamond transactions.
The DPA solved the problem of standardization in the diamond world. For thousands of years, diamonds had been priced by hand – with each dealer having to examine the stones with the subjectivity of their eyes. Now, Carats.io had taken the first step in creating a universal, automated evaluation method – paving the way for a diamond financial market.
However, an algorithm alone can’t improve the accessibility of a market. The diamond industry has traditionally been one of the world’s most exclusive domains. Due to the technical issues with diamond evaluation, the market had been closed to a select few – the highly trained diamond dealers who spent years examining the gems and building a personal network with other dealers. An outsider could engage the diamond world only through one of these mediators.
This is where the blockchain comes in – removing the technical and structural barriers preventing people from around the world from engaging with the diamond industry.
When the Carats.io founders first heard about the up-and-coming blockchain technology, they realized that it could offer the perfect solution to the accessibility issue. Blockchain tech is – at its heart – all about building a standardized, decentralized network, with transparency and trust between individual users. People can interact and trade with strangers, while not needing to be reliant on any mediators. A blockchain platform for the diamond market is the perfect solution to overcoming the traditional accessibility barriers.
By developing the CARAT token, a cryptocurrency pegged to and backed by real diamonds, Carats.io have been able to move the diamond industry on to the blockchain. Investors can now buy diamonds without having to ever even come into contact with the actual stone (although, being fully redeemable, investors can convert their crypto holdings into diamonds at any time). Instead of having to walk into the actual, physical diamond market to meet a dealer, they can now purchase gems with the click of a button on their mobile phone. All the tedious, hands-on steps of the past, including buying, storing, transferring and insuring diamonds, are no longer an issue. Thus, the financial market can now be opened to investors from around the world, including those completely new to the exciting world of diamonds.
Want to find out more about why an investment in diamond-backed currency is right for you? Join our Telegram.