Origins in India
Knowledge of diamond and the origin of its many connation start in India, where it was first mined. The word most usually used for diamond in Sanskrit is translitereated as vajra, "thunderbolt," and indrayudha, "Indra's weapon." Since Indra is the warrior god from Vedic scriptures, the foundation of Hinduism, the thunderbolt symbol indicates much about the Indian conception of diamond. The flash of lightning is a suitable comparison for the light thrown off by a fine diamond octahedron and a diamond's strong hardness. Early descriptions of vajra date to the 4th century BCE which is supported by archaeological proof. By that date diamond was a prized material.
Writings: The initial known reference to diamond is a Sanskrit manuscript, the Arthasastra ("The Lesson of Profit") by Kautiliya, a minister to Chandragupta of the Mauryan dynasty in northern India. The work is dated from 320-296 before the general Era (BCE). Kautiliya states "(a diamond that is) big, heavy, capable of bearing blows, with symmetrical points, capable of scratching (from the inside) a (glass) vessel (filled with water), rotating like a spindle and brilliantly shining is excellent. Diamond with points lost, without edges and defective on one side is bad. Indians known the qualities of a fine diamond octahedron and prized it.
Archaeology: No diamonds have been found in ancient sites, but holes in ancient beads show diamond's "footprint," cylindrical holes with prominent concentric grooves left by a twin-diamond drill. The holes are unlike the marks of any other modern or ancient drilling technique -- an autograph of this diamond technology. Beads from sites in Sri Lanka, India, Thailand, Yemen and Egypt show the symbols of diamond drills prior to 700 CE and as early as the 4th century BCE in Yemen.
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