Diamonds & The Blockchain VS. The Old Guard

Not every combination seems natural from the first moment it is tried out, but sometimes even weird sounding combinations just seem to work.

Peanut butter & jelly doesn’t sound like a great combination - but there it is.

Combining Heavy Metal and Classical music would not be most people’s first choice in music, but give Metallica & the San Francisco philharmonic a listen and there’s no denying it just works.

So it should come as no surprise that even in the financial world you might sometimes run into strange bedfellows, for example - Diamonds and cryptocurrencies.

One is an age old asset that has been around for many millennia and is run by an industry that is so closed off to outside forces it may as well be a mysterious cult.

The other is the very definition of innovation, a toddler by every financial definition possible and for the last couple of years is the “it” word for anyone with half a dime’s worth of investment in financial markets.

So how is it possible for the two to work together?

Well, the answer lies in the fact that despite Diamonds being an asset for all intents and purposes, it simply can not be traded as such.

The common man or woman wanting to buy a diamond as an investment, for whatever reason, would find it nearly impossible to do so, and if you want to sell a diamond to liquidate it, well, you have few options and most of them will charge you a fee that will likely end up being anywhere from 30% to 50% of the worth of your stone.

Hardly ideal conditions.

But let’s say you have some spare money you’d like to invest and you look at Gold or Oil for example - two of the most popular asset classes.

You’ve got plenty of ways to invest in either of the two, and you’ll have advisors and brokers lining up as far as the eye can see to fight over the money you’ve got - they’ll cut off commissions, reduce handling fees and stumble over themselves trying to land your account.

And all because Gold and Oil are recognized asset classes freely accessible to all and Diamonds are simply not there yet.

But Diamonds are getting there, sooner rather than later, and that’s not even the best part.

Consider this if you will - the more established a market it, the harder it gets to find profitable opportunities, the market is crowded from both seller and buyer sides and you’d have a harder time finding a good “deal” to invest in.

But what if you could invest in an asset that is not a part of an overcrowded marketplace? A market that is still “virgin” and ripe with opportunity?

Welcome to the Diamond market my friends.

A market that currently has only 1% of all diamonds being used for investment purposes out of an estimated 90 Billion USD per year.

Now before you rush ahead, we should clarify this - such a market is out there, but there is still no way to truly harness its potential.

That will change soon when CEDEX opens its platform, a platform which will allow anyone on the planet to log on, upload a diamond and sell it to the highest bidder (or anyone else that they prefer to sell to).

And how does the blockchain enter into this?

Well, the blockchain may be the most innovative and easiest way to create instant “contracts” for the selling or purchase of items such as diamonds and for tracking payments.

Essentially, using blockchain technology insures that both seller and buyer can instantly confirm the transaction took place in a satisfactory way and move on to the next transaction.

So there you have it - a market that is untapped and ripe for the picking, a technology that allows for instant transactions and endless opportunities for profit.

The question now becomes not “if” you should invest, but rather “when” you plan on doing so.