Diamonds are used to make the top tier tools and weapons. Diamonds are very rare in game, once prospected, it can now be bought from the block store. You can also also smelt diamonds in a furnace to create diamond ores. These are used to create items such as diamond pickaxes, shields, swords, etc. Diamonds are very expensive to buy and and a cheaper way to find diamonds is to find then underground. They are common to find at the bottom of the world. This is time-consuming but may be a better option for one with little, or no gold pieces.