The World’s 1st Destroyed Diamond NFT: Who, What, When, Where, Why & How

In August 2021, I relocated and realized how much hassle there was to keep your valuable jewelries safe when moving. None of this trouble would exist, I thought, if the store-of-value function of these jewelries is transferred to a digital asset.

That thought inspired me to post this tweet:

If you make a NFT of a real diamond, and the diamond itself gets destroyed in a fire tomorrow, you still have the same asset.

Because the token still exists and is in limited supply just as before. Nothing has changed.

What NFT is doing to the concept of asset, few understand.

— Tascha (@TaschaLabs) August 22, 2021

Little did I expect the tweet to go viral and attract legions of haters. Some people were really upset. I was called all sorts of names.

I decided I needed to do this exercise for real. So I went and bought a real diamond for $5k—> destroyed it—> minted a NFT for the diamond—> sold the NFT. I wanted to see how much value the NFT retains.

Many don’t understand why this exercise would work, including my mother who is a savvy investor and an accountant for 30 years. I had a long debate with her, which I wrote about here.

But my basic idea is that a physical asset like a diamond has value because of two functions:

1/ physical utilities function

2/ asset function as a store-of-value (SoV)

When you destroy a diamond and create a NFT in its place, you transfer function #2 to the NFT. Since by destroying the diamond, the 1-to-1 mapping between diamond and NFT is cemented, the NFT should retain the SoV part of the diamond’s value.

A NFT can serve the role as a SoV, because it’s able to satisfy 3 basic criteria for something to qualify as an “asset”:

1/ durability

2/ limit on supply

3/ social agreement

I also think overtime NFTs will replace physical assets like diamond and real estates, because NFTs are a much more user-friendly asset class for holding and transacting, compared to physical assets.

I explained all the above in more details in this video here.

I also estimated how much value the destroyed-diamond NFT should retain, by separating the values of the diamond’s two functions, and adding the NFT’s liquidity premium. See the breakdown here.

There’s so much confusion about NFTs and their role as an asset class. Because it’s challenging people’s traditional assumptions about what assets are and how they work.

I hope this NFT project helps you challenge your own mental framework as well and understand NFT more. Digital assets replacing physical ones is an inevitable trend of this century. You cannot afford to not understand it.

Update: The destroyed diamond NFT has been minted and is now listed on OpenSea.

Tascha’s Destroyed Diamond NFT Timeline

Tue, Aug 24 2021, 5:38 PM EST:  Diamond purchased on Blue Nile for $4999

Purchase video:

Purchase receipt:

GIA certificate:

Mon, Aug 30 2021, 10:40 AM EST:  Diamond delivered by FedEx to Tascha’s house

Delivery and unboxing video:

Tue, Aug 31 2021, 6:13 PM EST:  Diamond destroyed at Modern Auto Body Auto Service Center in Falls Church, Virginia

Diamond destroying process video:

Destroying location:

Sat, Sep 4 2021, 10:42 AM EST: NFT contract created on Ethereum blockchain.

Sat, Sep 4 2021, 11:41 AM EST: NFT listed on OpenSea. See the NFT listing here.

Relevant Resources

• FAQ video:

• Youtube playlist:

https://www.youtube.com/playlist?list=PLYf5fYPJnU2zLmWDuXQLjQ8AKiXCsYCFy

• Twitter thread documenting the project:

Ok, you've all convinced me this is an experiment that needs to be done. So here's the deal.

I'm going to buy a real diamond–> create a NFT for it–> list it on @opensea–> destroy the original diamond. I'll ping this tweet on my profile so you can track progress.

Stay tuned. https://t.co/3VoiiVIILk

— Tascha (@TaschaLabs) August 24, 2021

NFT listing on OpenSea:

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