The evolution of traceability. The evolution of traceability. The evolution of traceability. The evolution of traceability. The evolution of traceability

How is blockchain improving it?. How is blockchain improving it?. How is blockchain improving it?. How is blockchain improving it?

18 March 2024

The evolution of traceability. How is blockchain improving it?


by Benjamin Teisseire

Traceability is not a new concept. It is a foundation for trust, and therefore any business relation. It provides security, authenticity and reassurance between parties. It enables buyers from any product to make conscious, fully informed buying decisions. 


The issue has two main aspects. Firstly, as the luxury market has been growing tremendously and its reach has globalized, it has been met with the pendant of its success : the rise of counterfeiting. This is a major concern for all luxury brands, as counterfeiting can damage a brand’s perception and overall desirability. The second aspect is part of a wider ESG approach where companies are more and more expected to be transparent about their material sourcing. These growing concerns and constraints call for actions where technologies like blockchain can possibly help.

Undoubtedly, traceability is now a central concept in all business approaches and is increasingly encompassed in legal frameworks regimenting all aspects of the trade, including for watchmaking and jewelry. Whether it is pertaining to sourcing of colored stones, diamonds, gold or identifying finished goods as watches or jewelry pieces, traceability and warranties of authenticity are here to stay. The expansion of blockchain technology offers new ways to guarantee the products’ integrity and fight the ever-growing concerns of counterfeiting and fraudulent origins. We take a look at a wide array of applications and evolutions seen in recent years.

Rough diamonds

Rough diamonds

Diamonds traceability

Among the materials that require more and more traceability, diamonds come to mind firsthand. It started with the definition of the Kimberley process in 2005 which  led to the creation of the Responsible Jewellery Council. It was aimed at excluding « conflict zones » diamonds from the trade. Certifications followed, like the Code of Conduct of the Responsible Jewellery Council - created with the Kimberley Process -, that are still used today in the industry. But this does not guarantee the diamonds’ origin, nor their authenticity as laboratory diamonds are also emerging in the market. 

The initial catalyst [...] was that we were seeing more consumer interest in provenance.

Feriel Zerouki, Senior Vice President of Corporate Affairs at De Beers

De Beers, the largest diamond producer in the world, started delving into the issue around the same time, in 2003. Feriel Zerouki, Senior Vice President of Corporate Affairs at De Beers, explains: « The initial catalyst for our work in this area was that we were seeing more consumer interest in provenance and our work has since accelerated as the evolving sanctions landscape for Russian diamonds made provenance assurance more pressing. We first developed our Best Practice Principles assurance programme (an ethical code of conduct for all De Beers companies and all our Sightholder customers) and then we launched our Forevermark diamond brand for which we use an independently audited proprietary ‘pipeline integrity’ programme. However, it was in 2017 that we recognised the potential of emerging blockchain technology to support provenance assurance and this is when we started working on what would become Tracr™ ». 

Since 2022, the Tracr™ platform is now at scale and can provide a tamper-proof traceability insurance for all Sightholders (selected buyers authorized to partake in the selling of De Beers’ diamonds, editor’s note).

The melee diamonds issue

The technology seems to offer secured traceability for larger size diamonds. But can it be applied to melee diamonds that are plentiful in the watchmaking industry? The Senior Vice President admits: « Currently our Tracr™ technology solution is focused on larger sizes (rough diamonds of ‘four grainer’ size and larger, equivalent to polished diamonds of around half a carat and larger), but we are looking at ways to advance this solution for the small sized ‘melee’ diamonds. In the meantime, we use a strict, proprietary, third party-audited pipeline integrity mechanism to assure provenance of smaller diamonds for jewelry and watch brands ». 

Nonetheless, persistent rumors about Lab Grown Diamonds being mixed with natural ones in melee batches continue to plague the market. Ms Zerouki is very clear regarding the issue: « Only natural diamonds are registered on Tracr™ – they are certified by third party gem grading laboratories to ensure that they are natural and untreated. For decades, De Beers Group has developed a range of technologies to ensure all LGDs can be readily detected – for example the newly launched AMSMicro for the smallest sizes. Our Best Practice Principles also contain strict requirements on product disclosure to ensure that products are not mislabeled or misrepresented before, during or after sale. It should be noted that deliberate undisclosed mixing of natural diamonds and LGDs is a criminal offense and would see any company doing it expelled from international diamond trade as the international diamond bourses adopt a strict zero tolerance approach ». 

In June 2023, the Tracr™ origin program opened itself beyond the miner’s own stones to the diamond sector at large. The Gemological Institute of America (GIA) and Gemological Science International (GSI) have joined the platform, as well as big retailers like the US-based Brilliant Earth. This shows that technology is indeed developing to provide more secure identification and that more and more companies are jumping on the bandwagon to answer the growing demands of final customers. This profound evolution of expectations has been felt in all industries where sourcing of high value raw material occurs.

Colored stones pioneer

One of the pioneers in the field of traceability is a Swiss family-owned company dating back to 1854, the House of Gübelin. No blockchain at that time, but a strong will to guarantee the provenance and authenticity of colored stones on their jewelry since they started creating them.

Indeed, with the development of the industry, the first synthetic colored stones started appearing. That triggered their decision to create their Gem lab in the early 1920s to deliver authenticity certificates with their jewelry pieces. It stemmed from an ethic and a strong vision. Eduard Josef Gübelin was a dedicated gemologist who unveiled that stones from the same mines showed similar complex patterns within them. 

This was the start of the Gübelin authentication process. It has been perfected ever since. In 2017, they launched their Provenance Proof and their synthetic physical tracers that are applied to colored stones at the mine level. They started using the blockchain technology to secure the data collected in 2019. This unforgeable certificate will accompany the stones from the mine to the final set piece and during its whole life afterwards, recording ownership changes, repairs…etc.

Gübelin Jewellery Provenance Proof certificate

Gübelin Jewellery Provenance Proof certificate

This technology is open for everyone to use. As Patrick Pfannkuche, Head of communication for the brand explains : « The philosophy of Provenance Proof is to be inclusive and cooperative to enable more transparency and traceability for the entire industry. Our platform is therefore open to all stakeholders who wish to document their commitment to greater transparency. We welcome all organisations to use our platform and apply our technologies. Meanwhile, there are more than 700 companies, which currently use and trust in the Provenance Proof Blockchain ». 

Sharing best practices is key for achieving industry-wide transparency. Likewise, this applies to one of luxury’s main material: gold.

Sourcing of gold

As luxury consumes about 50% of all produced gold yearly, traceability of this material is of utmost importance. For a long time, the origin of the precious metal was not looked upon. With rising awareness of human rights and conflict related issues, transparency on its origins and production methods has become an unavoidable element. Many processes have been created to facilitate identification of gold’s origin and certification of its compliance to international rules. Large foundries are in the front line of these developments. 

Metalor, the Swiss company, one of the largest precious metal founder in the world, has been addressing this issue for a long time. Dealing with high value material, the company is used to stringent due diligences, loads of validation documents analysis and transport security. Blockchain technology has increased further the security level at each step of the process. But they have not stopped there. 

To be 100% sure that the gold we import comes from where it is supposed to [...] we want to be able to independently identify our sources.

Nicolas Carrera, Metalor Group Treasurer

Notwithstanding the 45 certifications that Metalor has achieved, which all enforce the traceability of the sources, their main concern remains, as Nicolas Carrera, Group Treasurer, puts it: « to be 100% sure that the gold we import comes from where it is supposed to, without depending solely on the information provided to us. We want to be able to independently identify our sources ». This is why Metalor has developed its own technology: the Geoforensic passport. « It is a true scientific validation of the provenance of gold. It determines a precise DNA identification of the mine the gold comes from ».

This is supposed to eliminate any « grey » sources, extracted in conflict zones or identified gold mines known for their harsh work conditions or unequivocal links to money laundering, like the Rinconanda mine in Peru, for example. « 100% of our mined gold lots are analyzed upon arrival and compared with our known Geoforensic signatures. If there is any discrepancies, the lots are rejected or more information is demanded », explains the group treasurer.

The main guarantee Metalor has put in place is to create a worldwide ecosystem of stakeholders who share the same values and apply the same control principles, those stated in the UN Global Compact. Since Metalor mainly deals with large scale mines, effective control is relatively easy. It is more complicated when Artisanal and Small Mines are involved, as certifications are rare and controls difficult.

Nonetheless, this Geoforensic Passport is being tested by other actors in the gold trade. « Academic developments are being made in South America and Africa to apply the validation principle of the Geoforensic Passport to ASM mines. This will enable a much greater identification and will implement a much higher security level for these mines ». The blockchain technology serves as a tool to secure further the information gathered…but it does not replace any of the physical controls that Metalor implements. « We work with Origyn for the technology side of the blockchain. They help us embed the data we have with the NFT they attach to our sourced gold bars », relates Nicolas Carrera.

Physical identification is the goal

What does that entail? Does it really help for traceability? Let us look into what Origyn has to offer. 

Launched in 2019 with a great promise of creating a new Blockchain protocol which will enable to generate authenticity certificates for all products, in particular watches, jewelry, diamonds and gold (coins, bars…etc.), Origyn is a non-profit Swiss foundation. Its original idea is to associate decentralized Blockchain solutions with artificial intelligence and machine learning. On paper, it would be the ultimate tool against counterfeiting, which is plaguing the luxury industry. More than 40 million fake Swiss watches are evaluated to be sold each year…compared with the 16.9 million actually exported (source, Federation of the Swiss Watch Industry FH, 2024).

This shows how important such a tool would be for all brands concerned about their image risk and potential loss of sales. Victor Gailly, operational manager at Origyn explains: « Once fully accomplished, the Origyn technology will provide a digital certificate that authentifies any luxury product in an instant, with a simple photo taken with your smartphone. It would be the end game for counterfeiting ». And a great leap forward for authentication and traceability! Unfortunately, it is not completely there yet. Victor Gailly develops: « The first phase of the technology which enables the traceability and the secularization of the data is efficient. We already have achieved the most difficult part being able to store over 3.5GB of data for each product, whether videos, pdf documents, scheme plans, scans, pictures…etc . The biometric identification and authentication is getting close. It will be a game-changer. We hope that within the next 1 to 2 years we will be able to have the artificial intelligence analyze in an instant over 1 billion lines of information on a product.».

But for now, the blockchain still just records data from the documents delivered by the owner…so indeed, an authentication generated through the physical characteristics of a product and its ultra-high definition images would be a huge improvement. At this point, the Origyn blockchain technology is being experimented with big companies in the gold industry, such as Metalor, for example, where you can find QR codes on their gold bars to identify them unmistakably. Now customers can actually buy physical gold through the NFTs they have created for each of their bars, for example. It makes ownership and trade a lot simpler and safer. Moreover, it can record their Geoforensic passport as well on these NFTs.

Breitling Gold Passport

Breitling offers a certificate secured by the blockchain that provides environmental data as well as the watch passport

Blockchain is not the panacea

So we see the technology is not yet the perfect solution towards traceability. Nonetheless, it is used more and more, as the multiplication of watch certificates clearly shows.

Arianee, one of the companies that offers these type of passports for the industry, develops these based on the blockchain technology. Pierre-Nicolas Hurstel, co-founder and CEO, explains : « Arianee’s goal is to provide an identification of luxury products secured by the blockchain technology ».

Here's how it works: Arianee enables brands to create digital passports “on chain”. These digital assets consist of a content file to store relevant and evolutive product information (e.g. sourcing, materials, time-stamp events, labels). This content can be stored on any server chosen by the brand, connected to a record on a public blockchain. Thanks to cryptography and blockchain architecture, brands can store these digital product passports in a secure, encrypted vault (a wallet). Arianee acts as an enabler and an abstraction layer, allowing brands to issue the passports easily from their information systems while enjoying all the properties of this new technology: they fully own and control their data.

This solution has already been adopted by several watch brands like Panerai, IWC or Breitling, who can offer numerical passports for any of their models. It also offers the opportunity for brands to personalize their loyalty programs. It is a very coherent way for brands to get closer to their customers and get to know them better…But does it truly help on traceability?

Pierre-Nicolas Hurstel, Arianee’s CEO clarifies: « One needs to understand the difference between traceability and authenticity. Arianee assigns a digital product passport to a product post-production, enabling the tracking of all engagements throughout its lifecycle downstream. However, ensuring authenticity, especially for products lacking native digital identification, involves various factors, such as serial numbers and maintenance history. Arianee's digital product passports streamline data aggregation and provide reassurance regarding engagements with a product over time. While this approach makes it challenging for illicit sellers to operate, it doesn't entirely replace physical inspection ».

As of today, Arianee has equipped 1.7 million products with a digital passport and recorded 601K on-chain events (for example, to record the date of original sale, beginning and end of warranty or service details), which seems very small compared to the amount of luxury product sold. Still, at a larger scale, it could be applicable to all « sustainable, repairable and re-sellable » products and it would make counterfeiting very complicated…but, as Hurstel admits : « the Blockchain is not the panacea. It should complement thorough physical examination processes, physical data carriers or finger printing technology ».

Objective limitations

As shown in the above examples, the technology is still confronted to limitations that no certifications can remedy as of today. Indeed, recent occurrences have unfortunately unveiled these limits, whether products or materials are secured by the blockchain or not.

Rumors of lab-grown diamonds being mixed with natural ones, especially at the melee level, still surface periodically, notwithstanding the controls and certifications enabled by the blockchain technology. Alrosa, the Russian state company, the world’s largest diamond producer, whose diamonds are under severe embargo since the start of the Ukraine war (with the latest set of restrictive measures adopted by the EU and the G7 in January 2024), is still able to reach the market through loop holes of the trade going through less principled platforms. But, overall, the will for a more transparent world, more traceable sourcing and better authenticated products is getting stronger.

In that sense, blockchain offers a great re-assurance and traceability tool. Its decentralized and tamper-proof components enable to build trust around it and all the products it relates to. But the authenticity of this information still requires thorough due diligence upstream of any certification. Otherwise it might just « secure » inaccurate data. 

The potential is soon there to include physical information that will ensure the unmistakable authenticity of a product. And it could go a lot further by integrating all sustainability and human rights respect data available onto the blockchain certificates as well. This would indeed be a true revolution. 

Until then, trust and technology do not exclude thorough physical controls.