Lab created or synthetic diamonds are created under laboratory conditions that imitate the natural process of diamond formation. While natural diamonds are formed over the course of millions of years, millions of miles deep into the earth's surface, the process is sped up in a laboratory where they are created within a time span of just a few days. Because these stones are chemically and structurally identical to the real thing, they are classified in the same way as real gems by the Gemological Institute of America. There is no difference in physical, chemical and optical properties between lab created and mined diamonds, and just like the mined version, they are graded by their carat, cut, clarity and color.
Diamonds are produced in the lab using one of two methods: High Pressure High Temperature (HPHT) and Chemical Vapor Deposition (CVD), with the latter method being much more common for jewelry grade stones. In this process, carbon and other trace elements is fed into a chamber at high pressure and heat. Over a period of days, this carbon vapor recrystallises on a bed of seed crystals, and the resulting gems can then be cut and polished.
Lab diamonds are also visually identical to a naturally formed diamond, and it is impossible for the naked human eye to tell them apart. A synthetic diamond would have to go through scientific testing using advanced geological equipment to be identified as a synthesized stone, as opposed to a mined one.
Diamonds that have been Lab grown diamond are generally less expensive to buy than mined diamonds. You can get a bigger lab created stone of a higher quality than a mined one, for the same amount of money. Also, they are more available in colors that are considered rare in nature, and when they do occur, they're very highly priced.
While colored stones are more easily available amongst the synthesized variety, colorless stones are exceptionally rare. Besides for their lower price, many people opt for lab created diamonds because they can be sure that they're not associated with conflict, which is often the issue with mined diamonds. Also, the effects on the environment that mining has are not an issue with synthesized diamonds.