Increasingly consumers want to be sure about the authenticity of the goods they purchase, while brands are wary of merchants selling counterfeit versions of their products. Counterfeit detection is increasingly needed in this day and age.
Large corporations have built blockchain-based solutions to protect their brand and revenues. However, these individual solutions are technology, infrastructure, and resource-intensive.
The counterfeit goods explosion
Trade of counterfeit goods is on the increase and this is impacting merchants in OECD countries and governments of non-OECD countries as this trillion euro trade also leads to job losses and tax evasion.
Some countries have dedicated markets and manufacturing units focussed on producing and exporting counterfeit goods. Traditionally, these practices have thrived on the cash economy. However, with the shift towards online shopping and the surge in the popularity and adoption of online marketplaces, most of this trade in counterfeit goods is moving to third-party seller systems on these marketplaces.
Luxury goods are the most targeted product category. Global luxury brands have made several attempts to enforce anti-counterfeiting legal actions across the globe, but these have not been able to curb counterfeit activities. Brands like LVMH, Prada, and Richemont have partnered to build the Aura Blockchain Consortium to fight counterfeit goods.
The solution built by this consortium will match a Product ID against a Client ID to validate the product's authenticity. This will also enable consumers to access trusted data about the entire lifecycle of a product, with no need for third-party verification. This is a significant step towards counterfeit prevention and detection.
The solution is similar to the token-based infrastructure that Worldline already uses today to store card data securely so consumers can reuse them for payments at known merchants. A similar token-based system could provide a simplified mass-market counterfeit detection solution for all brands.
Worldline’s traceability solution
Worldline has over a decade of expertise in developing traceability solutions. We have been one of the first companies to implement comprehensive product traceability systems between the private and public sectors to combat illicit trade in all its forms. We have already built traceability solutions for our merchants to offer their consumers the ability to track the origin of products like tobacco and salmon.
The rise of NFTs
Recently, the market for ownership rights to digital art, ephemera and media (known as NFTs), has exploded. NFT is an abbreviation for Non-Fungible Token, a unique digital identifier that cannot be copied, substituted, or subdivided, and is recorded in a ledger like the blockchain.
What is still not certain is whether there will be a long-term use case for all digital media currently sold as NFTs. They are easy-to-replicate products that might be pirated easily. Nonetheless, there seem to be promising use cases around collectables (first tweet, source code of the first website, etc.) and music that might drive the future of NFTs. Here NFTs provide a simple proof-of-ownership tracking token of a public/open-source digital media.
NFTs cross-over from digital to physical
- There is an emerging need for a mass-market token-based solution on the blockchain for counterfeit detection
- NFTs have already been used for the same purpose but instead for digital media only
Could we soon see the use of NFTs for physical goods?