To identify if a diamond is real or not, first look at the stone through a magnifying glass, called a loupe, for any imperfections in the stone. Next, check the stone's edges to determine if they are sharp or smooth.
It is rare for a real diamond to be flawless. If the stone does not have imperfections, it is either fake or a lab-created diamond and should be evaluated by a gemologist. If the stone has sharp edges, it is a real diamond. Also, the mounting and setting of the stone are evidence of the actual value of the stone. Gold plated metal or silver indicate a fake diamond, while gold and platinum indicate a real diamond.
Another way to determine the authenticity of a diamond is to rub sandpaper against it. Diamond is one of the hardest materials in the world and sandpaper does not scratch its surface. Breathe on the stone to see if it fogs over. Diamonds do not fog because they cannot retain heat.
When held to a light, a fake diamond appears to have rainbow colors inside the stone. A real diamond only sparkles white and grey but does reflect rainbow colors onto another surface. A real diamond also refracts light much more than a fake diamond does. For example, if the mount of the stone is visible through the stone, it is a fake diamond. A real diamond scatters light so much that it is hard to see through the stone.