Blockchain is becoming more and more popular, tempting companies to replace their current solutions by a blockchain anti-counterfeit solution. Although blockchain has many advantages, including perfect traceability of the supply chain and tamper-proof data, one must be cautious about compromising the security of physical products. While blockchain alone cannot replace anti-counterfeit solutions, it can be an extremely valuable add-on.

 

In this article, I will decrypt the advantages and disadvantages of blockchain against counterfeiting for physical products.

 

Is blockchain new?

Blockchain has been used for many years to provide a financial ecosystem and is more and more widely used for traceability of the supply chain. Up to the present, although tested,  it has been unsuccessful for medical data and voting system.

 

What is a blockchain?

The blockchain system is a technology to store and transmit information. It’s like a book on which everyone can write some data and which everyone can read but that which no one can either erase or destroy.

Transactions are grouped by blocks of data which are validated by miners. A validated block is added to the chain and the transaction can be read. Therefore, one cannot change a block without modifying the whole chain.

Blockchain was initially used only for digital products. If used on physical products, the need of a smart tags appears.

What are smart tags? Smart tags are unique identifiers that will follow each product through its complete life cycle into the supply chain.

 

Use of blockchain anti-counterfeit solutions

Some companies are now claiming that they could use blockchains to prevent counterfeiting. In my view, the biggest advantage for blockchain anti-counterfeiting solutions is that its data cannot be tampered with or altered.

Now let’s analyze how this blockchain anti-counterfeit solutions system isworking for a physical object that needs to be protected against counterfeiting, for instance a high value watch.

  1. A serial number is added to a valuable object (such as a watch for example). This serial number can be simply engraved or added as a smart tag such as QR code or RFID.
  2. This serial number is entered into the blockchain together with other useful information about this precious product(such as the provenance information, previous owner,…)
  3. All the important steps in this watch life are recorded into the blockchain.

 

In summary, this blockchain anti counterfeit solution is working as an improved certificate of authenticity. And thanks to the blockchain, you can be certain that the certificate of authenticity is genuine.

This is valuable information if you are certain that the object you have in hand is not a product of counterfeiting. For example, you could not resell the watch, claiming to be its owner were that not true.

Therefore, some pioneers, especially in the luxury industry, are using the blockchain in addition to other anti-counterfeit solutions.

The use of blockchain is also entering the pharmaceutical industry thanks to initiatives such as Pharmaledger; with which AlpVision is fully compatible.

Use of blockchain as unique solution to prevent counterfeiting

Now imagine you solely rely on the blockchain as an anti-counterfeit solution. If you have a watch featuring a certain serial number in your hands, you would be able to retrace the entire life of the watch featuring this specific serial number.

However, you would never know whether this is the authentic watch or a product of counterfeiting featuring the same serial number. Therefore, this kind of anti-counterfeit solution would probably be rejected in a court case.

Furthermore, a perverse effect of blockchain anti-counterfeit solutions, when used alone, is the same as was the case for serial numbers years ago. End users feel more confident and less cautious, eventually leading to an increase in the number of circulating counterfeits.

AlpVision provides Forbes 2000 companies with solutions to prevent counterfeiting that are perfectly compatible with blockchain and in some cases already integrated into the blockchain. This has the advantage that the object still can be authenticated, even if the serial number is scratched and no longer readable.

For example, AlpVision Fingerprint technology in combination with the blockchain creates one of the most effective solutions to prevent counterfeiting thanks to this block technology that also secures the supply chain.

Do you need more information on how to implement a secure blockchain anti-counterfeit solution?

 

Please contact us, we will be happy to answer any question you may have.

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