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Will Lab Diamonds Hold Their Value?

Will Lab Diamonds Hold Their Value?

You know what they say – diamonds are a girl’s best friend. Indeed, what diamonds can bring to one’s life goes far beyond just the financial value. We give diamonds to our loved ones on special occasions, and the meaning behind that surpasses any financial gain.

However, when we’re talking about diamonds, most people’s minds go to the natural, mined diamonds. Many don’t even know that there’s an alternative. 

But, there is – lab diamonds. 

Naturally, if you’re familiar with these, own them or want to purchase them, the question “Will lab diamonds hold their value?” must have popped up in your mind. 

The answer to this is more complex than most might think. There is a lot that goes into it, but don’t worry, we’ve got you covered.

So, if you want to find out more about lab diamonds’ value in the future – keep reading!

Natural Diamonds Vs. Lab Diamonds

While the difference in origin between these two types of diamonds is evident just from their names, some differences aren’t as obvious

But they contribute a lot to their “treatment” today, nonetheless. Here is just a quick overview of both:

Natural Diamonds

Natural or mined diamonds are formed in the Earth’s crust in conditions that cause carbon atoms to crystallize, creating diamonds. They are then mined and used for many different purposes – think jewelry, for example.

Natural diamonds are pretty complicated to get ahold of – and even more complicated to get them into their desired form. They require a lot of resources, energy, and time, making the whole process very unsustainable.

These diamonds usually take between 1 and 3.3 billion years to form. 

As you can see, diamonds take their time. That is something we cannot affect or speed up, so we pretty much depend on nature in full here.

As a result, the price of the final product, regardless of whether it’s jewelry or something else, is pretty high. That means that a large majority of these products are unavailable to a broader consumer base.

All of this has led experts to come up with alternative ways of creating diamonds – which brings us to our next point.

Related Read: How Can You Tell If A Diamond Is Lab Grown?

Lab Diamonds

Asas their name says it, lab or synthetic diamonds are created in laboratories and are man-made. They are made of carbon atoms that are arranged in the structure of diamond crystals artificially. These diamonds were first created in the mid-1950s and had been gaining popularity since then. 

The reason lab diamonds have taken off in production is because they are pretty much the opposite of natural diamonds when it comes to production difficulty: They are much more affordable, and they look exactly the same as natural ones.

However, that is not all. 

The production process is not ideal and requires a lot of energy – although a different kind than what is needed to mine natural diamonds.

For this reason – and a few others – many people have been questioning the value of lab diamonds. More specifically, people are starting to wonder how artificial diamonds will hold their value in the future.

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How Are Lab Diamonds Produced?

Not to get technical or anything, but to know the worth of lab diamonds, we need to know the basics of how they are made.

For years, lab-grown diamonds have been presented as the “eco-friendly option” or the “green” diamonds. However, that terminology is pretty icky and also not favored by the FTC. 

The reason? 

Such wording is unclear, and the claims are complicated, if not impossible, to substantiate. 

As we’ve mentioned, the production process isn’t very sustainable. The reason is that large quantities of energy are needed to produce a single lab diamond.

The process in which lab diamonds are made is called nucleation. It works by having a smaller part of a diamond, called a diamondoid, promote the growth of a bigger diamond.

The way scientists at SLAC create synthetic diamonds is by the process of chemical vapor deposition. What this means is that scientists sprinkle some crushed-up diamonds onto a silicon wafer which is then heated up by plasma.

Plasma can be seen as a really hot gas. So hot, in fact, that atoms do not exist anymore, but rather a soup of ions and electrons. This plasma, made of hydrogen and carbon, can either dissolve diamondoids or promote growth, resulting in larger diamonds.

Learn More: How Much Does It Cost To Make A Synthetic Diamond?

The Use Of Lab Diamonds

When you hear the word “diamond,” we bet that the image in your head is that of sparkling jewelry and gems in a fancy jewelry store. Or better yet – around your neck, for example.

However, as we have hinted at before, that’s not all they are good for:

Due to their incredible durability, lab diamonds have a future in many fields – medical, technological, and many more.

Lab diamonds are much easier to produce and cheaper at that. But they are of the same chemical structure as mined ones. 

That’s what makes them so great. 

Lab diamonds have a future in orthopedic device production precisely because of their low friction, biological inertness, and durability. To add to that, a more tangible piece of information is that there are currently ongoing clinical trials involving lab diamond spinal disk replacement. 

How amazing is that?

Furthermore, many of the electronic devices that are now a key component of our everyday lives are made in part of lab diamonds. Cellphone screens are just one of many parts that are made of this artificial gem.

To add to the usefulness of lab diamonds in the tech industry, it’s on its way to completely replace silicon since it is a much better semiconductor. 

Just think about all of the devices you encounter on a daily basis, which are partly made of silicon. In the future, all of that could be made of lab diamonds!

Not to mention that the use of lab diamonds in creating devices has the potential to reduce our carbon footprint by at least 10% in the next few decades. That alone makes them one of the favorites in light of the new ecological movements.

What Determines The Value Of Diamonds?

Lab diamonds were created with the intent to offer a more sustainable and affordable option than mined diamonds. From the start, it was evident that their worth would not be up to par with natural diamonds, but that’s part of what makes it work:

By throwing synthetic diamonds into the mix, diamond jewelry is now available to more people than it used to be. 

But what is it that determines how valuable diamonds will be?

When talking about the value of diamonds, most people think of the resale value. Basically, how much you can get if you want to sell your diamonds.

Here’s the catch: Natural diamonds have gotten continuous hype over the last several decades as extremely valuable. And to an extent, this is true.

However, what most diamond retailers fail to tell you is that once you have left the store, the resale value of your diamond drops to 30% of the price you purchased it for initially. Yes, you read that right; 30% of the initial price!

That goes both for natural and lab diamonds.

What makes natural diamonds so expensive is their rarity, the whole mining process, then the manufacturing stage, as well as their incomparable durability.

Additionally, diamonds go far beyond their place in jewelry. 

Their sturdiness makes them perfect for creating other items of use for people. That is another added benefit of this gem.

Obviously, in the economic sense, the current value of an item on the market is determined by how sought after it is – demand – as well as how much of it there is, called the supply.

Natural diamonds are limited due to the process of their formation and everything that follows it. But the demand was, and still is, relatively high – hence the high price point.

However, in the last couple of years, the natural diamond market has plummeted somewhere between 10 and 20%. And this is where lab diamonds come in.

Learn More:

Will Lab Diamonds Hold Their Value In The Future?

As you’ve seen, a lot needs to be taken into account when it comes to this question. And, even with all this information, experts are having a hard time agreeing on a unified conclusion.

On the one hand, natural diamonds, due to their uniqueness, are unlikely to lose their importance and demand completely. Their status and history are there to make sure they stay dominant in the jewelry business and amongst buyers, at least.

That puts lab diamonds in somewhat of a dependent position, as they will always be compared to mined diamonds in terms of their value.

On the other hand, the spectrum of things lab diamonds are able to be used for is only getting broader, which makes the demand for them increasingly more significant.

By creating lab diamonds, we are able to get the same material, just at a fraction of the cost of their natural counterparts, making them the primary choice when it comes to the production of electronic and medical devices.

That inherently puts lab diamonds in a better position than if they were only being used to create jewelry, for example.

So, suppose we were to look at the complete picture. In that case, the areas in which lab diamonds are the primary choice are much broader in comparison to the jewelry business in which mined diamonds remain dominant.

Also worth mentioning is the fact that more and more people are willing to purchase synthetic diamond jewelry nowadays, not caring about its origin.

That leads us to the conclusion that in the upcoming years, there is a sufficient number of facts that point to a bright future for lab diamonds. 

Indeed, opinions differ, and some might disagree and say that natural diamonds are timeless and cannot be replaced with artificial ones.

At the end of the day, it’s essential to keep in mind that the resale value of a diamond drops significantly once it has been purchased. It’s not something that should be looked at as a “safe investment” that will guard your money.

If you really want to buy a diamond, do so not because you want to resell it at a later time but because it will serve a specific purpose when you buy it.

Conclusion

Everyone wants a secure profit, and there are certain items that will always hold inherent value and, in turn, provide just that. 

Since diamonds are one of those century-old gems that have managed to remain popular and valuable throughout centuries, it is logical to assume that they fall into this category.

However, when talking about diamonds, we need to make a distinction between natural (mined) diamonds and lab (synthetic) diamonds. 

With that comes the question, “Will lab diamonds hold their value?”.

Hopefully, this article has cleared up some uncertainties about this. Here is a quick summary of all the information we’ve gone over:

A natural diamond is actually crystallized carbon created underneath the Earth’s surface, which can take up to 3.3 billion years. On the other hand, a lab diamond is a synthetic version of a mined diamond created in a laboratory.

The process of creating lab diamonds is called nucleation and consists of a bigger diamond building off of a smaller particle called a diamondoid.

Lab diamonds can be used in several different fields, from jewelry making, technology to medicine. In fact, most of our electronic devices are at least in part made of lab diamonds.

That is a significant contributor to the value of lab diamonds, but when talking about the importance of diamonds in general, there are many different contributors.

Supply and demand being the obvious ones, but also how rare natural diamonds are, how complex the mining and production process; all that contributes to the high price of mined diamonds.

On the flip side, the production of lab diamonds costs way less. They are much more common but are also much more affordable, making them the primary option in so many cases.

Perhaps the only sphere in which natural diamonds still dominate over lab-grown ones is jewelry. However, some changes are seen there, too, with more and more people being willing to purchase synthetic diamonds at a lower price than their more expensive, natural counterparts.

Maybe the most important piece of information to know when it comes to this topic is the fact that once purchased, diamonds, regardless of their origin, drop in value to about 30% of what was originally paid for them. 

And that makes them a bad investment for those who purchase diamonds only to resell later on.

All in all, there isn’t a consensus amongst experts as to the future value of lab diamonds, but looking at the ever-expanding list of areas in which lab diamonds can be used, it is safe to say that they aren’t going anywhere.

But, if you want a safe investment that can end up being profitable in the future, maybe diamonds aren’t for you – lab-grown or natural.

Whatever it is that you decide, make a choice wisely and enjoy it!

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