Introduction
The aim of this paper is an introduction to Everledger and its work in utilising Distributed Ledger Technology (DLT). This is in preparation for the oral evidence session for the Treasury Committee Inquiry into “Digital Currencies”, to be held on Tuesday, 1 May 2018.
While the inquiry has a main focus on digital currencies and the impact of DLT on financial institutions, Everledger understands that there is another stream of interest in other applications of DLT separate from digital currencies and the corresponding impact.
As requested by the Treasury Committee, it is in the interest of this that Everledger will engage in providing relevant information with the following structure in this paper:
- Background on Everledger
- How Everledger utilises DLT
- Industry Applications by Everledger
- Ethical and Sustainable Finance Impact
- Background on Everledger
Founded in 2015 by Leanne Kemp, an Australian entrepreneur, Everledger is a leading emerging technology enterprise that tracks the provenance of high-value assets on a global digital ledger.
The premise of Everledger’s inception is the awareness of the global landscape of risk and fraud in the industries of high-value assets, particularly that of diamonds, and the need to enable transparency across traditionally opaque supply chains.
In addition, awareness by governments, banks and consumers has been increasing in the areas of sustainability and ethical sourcing. There has been an increasing demand in being empowered with knowledge about the goods that they consume.
Encrypting the provenance of these high-value assets in an immutable and authenticated manner asserts auditability throughout at every stage of the supply chain process. This serves to mitigate global risk and fraud challenges faced by stakeholders such as insurance companies and banks.
This then drives the building of trust amongst all stakeholders and facilitates national and international trade.
- How Everledger utilises DLT
Emerging technologies including DLT (also known as blockchain technology), smart contracts, IoT and machine vision have been harnessed to create solutions for encrypting the authenticated provenance of an asset through a distributed ledger platform (also known as Everledger’s blockchain-based platform).
The core characteristics of blockchain technology - immutability, auditability, security, speed and scalability - combine with other technologies to form a hybrid model for innovative and effective solutions.
These technological solutions are developed and deployed to markets where provenance matters, providing stakeholders across supply chains with an immutable history of an asset’s authenticity, existence and ownership.
Everledger started off with tracking the provenance of diamonds on its blockchain-based platform.
A unique set of data points is extracted from a diamond to create a digital thumbprint. This data aggregation includes high-resolution photography, ownership records, measurements and defining features. It is then encrypted on the blockchain permanently, with each movement along the supply chain subsequently encrypted onto the same blockchain throughout its lifetime journey.
From there, a clear audit trail is provided, to be used by multiple parties throughout the supply chain to verify authenticity and identify chain of custody. The use of smart contracts to empower the blockchain allows new value-added services to work in parallel with the supply chain.
To date, Everledger has the provenance of over 2 million diamonds cryptographically-certified on its blockchain-based platform.
- Industry Applications by Everledger
Following the successful entry to market in the diamond industry, Everledger has also introduced its solutions into other industries. Key partnerships have been forged with industry leaders, in some cases, converging the respective technologies to collaboratively drive a paradigm-shift in the respective industries.
3.1 Diamonds
As mentioned in the previous section, Everledger started by tracking the provenance of diamonds. This came about as Everledger’s Founder & CEO Leanne Kemp, with a strong background in technology, jewellery and insurance, recognised the impact blockchain technology application can have on the industry fraught with risk, fraud and issues such as conflict diamonds.
Everledger started working with key diamond industry stakeholders and to date, has encrypted the provenance of over 2 million diamonds on its blockchain-based platform.
A partnership was forged with the Singapore Diamond Investment Exchange, to build a blockchain-based authentication and secure record-keeping service for trading diamonds on a global commodity exchange. Press release here.
In addition, the Diamond Time-Lapse Protocol, a traceability initiative for the entire industry was recently launched. This is a fully-inclusive, value-add initiative for every stakeholder, where everyone can participate and make a collective effort to take the diamond industry further towards the highest ethical standards. Press release here.
A partnership was also recently announced with the Diamond Durability Laboratory, which enables diamond damage risk assessment reports to be created and stored on the blockchain-based platform. Press release here.
3.2 Coloured Gemstones
A partnership was signed with the Gübelin Gem Lab to track the provenance of coloured gemstones.
In a world-first, this partnership sees the convergence of technologies, whereby Everledger’s blockchain-based solution combines with Gübelin Gem Lab’s Provenance Proof initiative which utilises DNA-based nanotechnology amongst other developing technologies. Press release here.
3.3 Jewellery
Brilliant Earth is the leader in ethically sourced bridal and fine jewellery and a partnership was announced whereby a blockchain-based system will be implemented across the Brilliant Earth supply chain. This is aimed to jumpstart the process of defining next-generation standards in the jewellery industry. Press release here.
3.4 Supply Chain Management
The SAP Ariba network connects buyers and suppliers from more than 2.5 million companies and 190 countries to discover new opportunities, collaborate on transactions and grow their relationships. Tracking and tracing goods before, during and after shipment has been identified as a major issue faced by companies. The potential for fraud and counterfeit goods is high. By teaming up with Everledger to track and trace goods on the blockchain-based platform, buyers and sellers are provided with increased visibility and control from shipment to receipt. Press release here.
3.5 Wine
Wine is also another industry that has seen high incidences of fraud and counterfeit goods. The Chai Wine Vault was developed by Everledger and a renowned wine authenticator to track the provenance of wine as an industry-first. Press release here.
3.6 Art
An investment was made in Vastari, the world’s largest private collection and temporary exhibition database. Art fraud is also a major issue and tracking the provenance of art pieces allows a way to mitigate the risk involved in the movement of art pieces for exhibitions. Press release here.
- Ethical and Sustainable Finance Impact
Transparency across global supply chains can also verify authenticity and identify chain of custody, driving next-level sustainable and ethical industry standards. This can enable financial services companies and institutions to identify financing opportunities with a higher sustainability and ‘green’ investment profile.
The following diagram shows how the type of data captured can be utilised by the respective stages across supply chains:
