This stone was cut as a geological oddity, rather than as a gemstone. I doubt it will ever be set as part of a piece of jewelry.
First, you notice three jagged shards or pieces on the left side of the rainbow shaped stone. These shards are from hardened lava that was broken and fell into a crack in the lava surrounding the shards. The lava, which was initially molten and then hardened, was at some later point in time broken by tectonic forces or by volcanic explosion or lifted by rising magma. The crack and the shards were later (how much later, you ask? How the hell would I know?!! ) filled in by a silica solution or silica gel that subsequently crystallized and formed the brown material surrounding the three shards.
The surrounding material is chalcedony (a micro-crystalline quartz structure). Chalcedony is a common material in many agates and can be clear, translucent, or colored. It is common in many semi-precious stones and in many agates. At the right edge of the chalcedony that filled the crack, a later silica solution or gel with additional mineralization providing color created the banded agate that is seen along the chalcedony boundary.
If you look to the right of the agate bands on the far right side of the stone you will see a jagged dark line forming another boundary, this time with lava on the right side being the other side of the crack being filled. The lava is brown with light colored flecks or dots. This silica agate banding cemented the chalcedony to the lava on the other side of the crack.
Scientists have no real idea how long these successive complicated processes take. No one, to my knowledge, has yet created a man-made agate.
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