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Diamond is the hardest known naturally occurring material, scoring 10 on the relative Mohs scale of mineral hardness and having an absolute hardness value of between 167 and 231 gigapascals in various tests. Diamond's hardness has been known since antiquity, and is the source of its name. However, aggregated diamond nanorods, an allotrope of carbon first synthesized in 2005, are now believed to be even harder than diamond. The hardest diamonds in the world are diamonds from the New England area in New South Wales, Australia. These diamonds are generally small, perfect to semiperfect octahedra and are used to polish other diamonds. Their hardness is considered to be a product of the crystal growth form, which is single stage growth crystal. Most other diamonds show more evidence of multiple growth stages, which produce inclusions, flaws and defect planes in the crystal lattice all of which affect their hardness (Taylor et al. 1990).

Industrial use of diamonds has historically been associated with their hardness; this property makes diamond the ideal material for cutting and grinding tools. It is one of the most known and most useful of more than 3,000 known minerals. As the hardest known naturally occurring material, diamond can be used to polish, cut, or wear away any material, including other diamonds. Common industrial adaptations of this ability include diamond-tipped drill bits and saws, or use of diamond powder as an abrasive. Other specialized applications also exist or are being developed, including use as semiconductors: some blue diamonds are natural semiconductors, in contrast to most other diamonds, which are excellent electrical insulators. Industrial-grade diamonds are either unsuitable for use as gems or synthetically produced, which lowers their price and makes their use economically feasible. Industrial applications, especially as drill bits and engraving tools, also date to ancient times.

The hardness of diamonds also contributes to its suitability as a gemstone. Because it can only be scratched by other diamonds, it maintains its polish extremely well, keeping its luster over long periods of time. Unlike many other gems, it is well-suited to daily wear because of its resistance to scratching—perhaps contributing to its popularity as the preferred gem in an engagement ring or wedding ring, which are often worn every day.

Unlike hardness, which only denotes resistance to scratching, diamond's toughness is only fair to good. Toughness relates to a material's ability to resist breakage from forceful impact. As with any material, the macroscopic geometry of a diamond contributes to its resistance to breakage. Diamonds cut into certain particular shapes are therefore more prone to breakage than others.

Diamonds occur in a variety of transparent hues — colorless, white, steel, blue, yellow, orange, red, green, pink, brown—or colored black. Diamonds with a detectable hue to them are known as colored diamonds. Colored diamonds contain impurities or structural defects that cause the coloration, while pure or nearly pure diamonds are transparent and colorless. Most diamond impurities replace a carbon atom in the crystal lattice. The most common impurity, nitrogen, causes a yellowish or brownish tinge.

At surface air pressure, diamonds are not as stable as graphite, and so the decay of diamond is thermodynamically favorable (?G = -2.99 kJ / mol). Diamonds will burn at approximately 800 degrees Celsius, providing that enough oxygen is available. This was shown in the late 18th century, and previously described during Roman times. However, owing to a very large kinetic energy barrier, diamonds are metastable; under normal conditions, it would take an extremely long time for diamond to decay into graphite.

Diamonds typically crystallize in the cubic crystal system and consist of tetrahedrally bonded carbon atoms. Lonsdaleite is a polymorph of diamond (and a distinct mineral species) that crystallizes with hexagonal symmetry; it is rarely found in nature, but is characteristic of synthetic diamonds. A cryptocrystalline variety of diamond is called carbonado. A colorless, grey or black diamond with a tiny radial structure is a spherulite.