Investing In Diamonds Is a Bad Idea—Can a New Cryptocurrency Change That?

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Diamonds as an investment has long been a controversial concept. Yuri Bodrikhin/Unsplash
It’s been more than two years since the Bitcoin bubble burst, leaving many over-leveraged tech-bro investors in a lurch. But the cryptocurrency movement didn’t just disappear; instead, its underlying technology, blockchain, has evolved in new and more niche directions.
Despite the short-lived hype of cryptocurrencies, the finance industry hasn’t stopped inventing new ways to peg blockchain onto other assets, creating a class of investment known as asset-backed cryptocurrencies. Tokens backed by commodities like gold and silver have already been established. And now, an emerging crop of startups are exploring the possibility in less conventional assets, like diamonds. In July, a startup called Icecap launched its marketplace for diamond investors, a seminal moment for the nascent niche.
Diamonds have always made for something of a dubious investment. At first thought, diamonds—at least natural ones—seem to fit the definition of an investment nicely: they are scarce, expensive, highly coveted and (supposedly) last forever. However, they lack a few key elements of a real investable asset, the first and foremost of which being that it’s damn difficult to resell a stone.
“Selling individual diamonds …

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