Luxury brands using blockchain tech to stop counterfeit products

Counterfeits are said to be a major problem for leading luxury brands worldwide. In 2017, luxury brands lost around $98 billion to counterfeits. These losses are said to be damaging both their reputations and profit, encouraging some brands to shift to tech that protects their products, consumers, and brand value.

In 2021, luxury brand multinational LVMH partnered with Cartier and Prada to establish Aura Blockchain Consortium to develop a "digital twin" for stylish products.

For those unaware, Blockchain is a digital ledger that cannot be changed, edited, or tampered with. The same technology reinforces cryptocurrencies, which have recently witnessed a price crash.

However, blockchain also has several other applications, and Aura is utilizing it to give luxury brands an exclusive digital identifier which will help guarantee customers that their purchase is original.

Daniela Ott, general secretary of Aura Blockchain Consortium, said that Blockchain is a fast-moving and complex technology. Aura is something that functions to make Blockchain easier to use for luxury brands.

Today, over 20 brands are using Aura's software, with approximately 17 million products recorded on the platform, says Ott.

Aura's software which is used for building a digital twin for physical products like handbags or shoes complies with an information ledger like source or material type, when and where it was made, and how many were made.

Ott says that this would offer consumers a higher level of protection and proof by acting as a digital certificate of authentication that uses bank-level encryption and is not at all possible to be faked, foiling counterfeiters.

Digital twins, which can be accessed via a webpage or mobile app, will be offering more insights about the product's origin, augmenting trust and traceability around ethical issues and sustainability for conscious consumers, Ott says.

Notably, more and more brands are shifting to Blockchain technology. In October 2021, designer streetwear group OTB joined Aura Blockchain as a founding member and Sarine Technologies, the diamond and gem specialist, also joined the consortium last month.

Source Credit - https://edition.cnn.com/2022/06/26/business/aura-blockchain-luxury-counterfeit-hnk-spc-intl/index.html