Blockchain is the Missing Link in the Kim Kardashian Diamond Robbery

Blockchain is the Missing Link in the Kim Kardashian Diamond Robbery

Often times it takes the success of one thing to allow for something related to become an even bigger entity. Like how Destiny’s Child’s success primed the world for Beyonce or the fame of Bitcoin to give rise to the blockchain.

Other times something horrible has to happen, so we can talk about something more important. Like Kim Kardashian getting robbed for her diamonds has allowed us to start a conversation about blockchain.

Not really sure how this connection is made? Well, blockchain could prevent the masked bandits from ever getting any value from those diamonds. Before I jump into that, I’ll give you a rundown of blockchain so that you can understand this connection, too.

Let’s pretend you are the proud owner of a Goyard bag (if you aren’t familiar, they are very valuable). You want to give it to me for my birthday, so you wrap it up in the comics section of the New York Times and gift it to me.

You can’t give that bag to anyone else because you only had one. There were no more to give. There was also no need for an intermediary person to parlay the transaction. We didn’t need my Aunt Suzie to verify the transaction took place. This same principle goes for anything physical: spaghetti, phones, clothes, and money.

Unfortunately, we no longer live in the Stone Ages where we only trade physical things. It’s a digital culture we live in with digital goods.

We have a problem known as the double-spending problem. No this isn’t spending two times more than we need. It’s a problem with digital goods where you can essentially “spend” something twice. Of course, there are systems in place for valuable things such as money, but that just presents the problem of a middleman controlling our transactions (i.e. that pesky 2.9% fee and the 3-5 business days it takes).

So, how do we get back to the good old days of the peer-to-peer transfer, but with digital goods?

Blockchain.

Let’s say Goyard started making limited edition digital bags to hold digital makeup for your Snapchat avatar. Goyard decided to sell these but wanted to keep their exclusivity. Their first thought is to save them to a flash drive and send them to you.  

You buy one of these coveted digital bags, copy the file and email it to 60 of your closest friends. Now there are over 60 identical digital Goyard bags. Where's the original? Which one is “real”? This is a big problem.

They need a digital record of who is supposed to have a digital Goyard bag, so they keep track on a ledger posted on their website. Anyone can go to that domain on their website and see who owns a digital bag. Good idea, but Goyard has all the power and could just move a few numbers here and there and now you no longer own an original. How do you solve this problem?

We give that ledger to everyone. Now everyone has a record of each digital Goyard bag and the transactions that are taking place. Therefore, you hold each other accountable because if one person’s ledger looks different than everyone else’s then you know they are fraudulent.

This sounds like a lot of work, keeping up with everyone’s transactions and constantly verifying things. Not to worry, if you are a part of the web of blocks, then your computer automatically does all of this work...and even does the enforcing of fraudulent actions.

There’s power in numbers.

The security lies in the number of ledgers (computers) that are verifying transactions. Every time a transaction is made and verified, a new block is formed with the history of every transaction prior to that.

That’s blockchain in a nutshell. Now, when you are standing around the water cooler and your coworkers are talking about blockchain, you can hop in the conversation like DJ Khaled and not play yourself.

While Bitcoin is the most known use case for blockchain, the implications are vast. Literally, any digital asset can be protected with blockchain: images, documents, music, etc…

Blockchain can also be the distributed ledger for physical goods, too.

What?! That’s crazy! Blockchain is like Bo Jackson--it can play football and baseball and be amazing at both.

How so?

Well, a physical good is given a digital identity, a digital fingerprint if you will, that makes it unique.

Let’s talk about Kim Kardashian (never heard that before). A diamond’s digital fingerprint is calculated based on its Cut, Color, Clarity, and Carat. Whoever insured her diamonds has this information but in the physical form. As we all know, physical documentation isn’t all that efficient.

So companies like Everledger, keep track of all data pertaining to a specific diamond, such as lineage and ownership, police reports, price point, etc… This allows jewelers, insurers and police to cross-check these precious stones and also submit new information.

There’s a lot of catching up to do with the millions of diamonds in circulation now, but if Kim K’s diamonds were recorded on the blockchain, my guess is that her robbers would’ve given up on trying to sell those suckers because they would’ve been caught very quickly.

Instead, Kanye is pissed off and cancelled a bunch of his upcoming concerts and Kim has taken to Twitter to let off steam.

I’m sure there are politicians turning Kim’s gunpoint robbery into a discussion about gun control, but we’re all tired of hearing the same stagnant argument.

That’s why I’ve created Quick Theories--to spur engaging conversations about the news in a refreshing way. Once a week I send an email to stimulate your creative side and I’d love if you joined the conversation. You can sign up here: http://quicktheories.com

Greg Peckham

CEO, Walking Eagle, Investments, Ltd.

7y

Thank you for the information, please write more on Blockchain, reference whomever, include information on murmuration.

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Dave Petterson

Mr Fixit. IT Consultant, Problem Solver and Troubleshooter

7y

A good explanation about blockchain and I do like analogies to make the point but you chose a bad one just to get the Kardasian name in the title, good marketing ploy though so bonus points for getting people to read about blockchain. :) The issue with the diamonds is that they are still valuable, by re cutting them, which reduces their size and worth you can make 'new' diamonds and still get something from them. Plus there are people that will buy stolen items just to keep in their collections. However, it is still a good point and could be used for anything that was rare enough to ensure that what you have is an original. I could see it being used for your expensive commodities as part of an insurance scheme. You can prove you have the item and you can't sell it and claim it was stolen as the insurance company would want the ownership transferred to them.

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Anne Asanovic

Legal/Executive Administative Assistant

7y

I did read the entire article and agree with Jeri Stuckey. This is supposed to be a business and career related forum and not Facebook II. Let's have more appropriate and useful articles pertaining to career networking.

Thobekani Mzimela

Technical Support Consultant at BLUE LABEL DISTRIBUTION

7y

I think this article is not in our best intrest

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