Photo Credit: bitcoin.com
MID House of Diamonds has announced that will begin accepting bitcoin as payment from clients for diamond and jewelry purchases, making it one of the world’s first gem dealers to recognize the cryptocurrency as legal tender.
Just eight years after it first became available, bitcoin is the today the world’s most prominent cryptocurrency and digital payment system. Working without a primary repository or single administrator, like a country’s central bank, it is a peer-to-peer system in which transactions take place between users directly, without an intermediary, other than the broker. These are verified by network codes and recorded in a publicly distributed ledger called a blockchain.
As crypto-currency, bitcoins do not physically exist. They are digital cash units that reside as bits on your computer, but they can be used to buy things.
They also are in great demand, increasing in value from about $570 per bitcoin to more than $4,300 between August 2016 and August 2017, translating into a rise of about 750 percent. But they are also quite volatile, falling to $2,900 a coin by September 15, and then rising to a record $6,994 on November 2. Converting them into considerably less volatile asset like a diamond may seem a prudent move.
How does one use bitcoin? First you need a bitcoin wallet, which is the equivalent of a bank account that allows you to receive bitcoin, store it, pay an invoice, and make a transfer to third parties. You also have to option of using a web wallet, which allows you to access your account from both your mobile phone and computer.
Once you have created your wallet, you will need fill it with bitcoins. The most common way is buy them from a cryptocurrency broker with a credit card or bank transfer. All you will need do is to provide the bitcoin address generated by your wallet and the bitcoins will be delivered. If you cannot afford full bitcoins, it is possible to subdivide them.
To pay with bitcoins in your wallet, you typically will go to the checkout on an ecommerce site, and choose the option of Pay with bitcoin, or click on the bitcoin logo.
If you are using a desktop wallet, your wallet will request you to check that all the details (order number, bitcoin amount, and bitcoin address) are correct, and, once you confirm, the wallet will make payment.
If you are using a web wallet, you will be provided with information about your order and the equivalent price in bitcoins, and also a QR Code that you need to scan. The code will turn green when payment has been completed.
The bitcoin conversion rate that you receive of the product in the payment window is normally guaranteed for just a few minutes. If the payment takes longer than the allotted time to be completed, it is up to the merchant to accept such a payment and, if not, to issue a refund for the order.
jewelry retail stages, elements like branding and marketing are more prevalent, and values fluctuate according to the location and setting in which the diamond is set and sold. Unsurprisingly, profit margins in the wholesale trade are the lowest in the entire pipeline.
And how are prices set? Price list operators are among the most powerful players in the wholesale polished trade, with the most well among them being the Rapaport Price List.
But as the Rapaport Group itself points out, these are unlikely to be the actual sales price, but rather “high-cash asking prices,” which it notes “may be substantially higher than actual transaction prices.”
Nonetheless, the price list is a relatively accurate yardstick of price movement. In the diamond wholesale trade, it is common to transact diamonds at a discount to the list price, although in certain cases diamonds that are in short supply or subject to speculative demand may trade at significant premiums. This is more likely to occur with higher quality goods.
MID House of Diamonds is one of the most important companies operating worldwide in the wholesale diamond market, with offices in Ramat Gan, Antwerp, New York, Los Angeles, Hong Kong, Shanghai, London and Tokyo, as well as an extensive online sales operation. Its massive inventory includes all shapes and sizes of loose polished diamonds from 0.10 carats to more than 10 carats in size, in both the standard and fancy color ranges. The company also offers its own lines of diamond-set jewelry.