Fight Club: Ousting Fakes With the Tech That Powers Bitcoin
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They say that when you buy a Louis Vuitton you don’t just buy an item of good quality. Of course, the leather is soft, the logo is flashy and the price tag can be off-putting. However, you also buy the service that comes with it. Knowing that your precious boots or a backpack can be taken care of at any store in the world makes this experience even more special. Doesn’t it?
Especially when you hear the amiable “I am sorry, missthis is not Louis Vuitton” from a lovely consultant at Louis Vuitton Maison Champs Élysées who looks at you with a sympathetic smile. I don’t remember feeling that miserable, diminished and humiliated ever in my life before. It seemed to me that the whole store was staring at me and thinking, “Look at this Russian girl! She probably thought she could trick the staff!”
As a matter of fact, I wasn’t. The handle of my favorite backpack accidentally broke after two good years of traveling everywhere with me. I bought it in Moscow a few years ago at the official shop for a crazy price, knowing that this will be the item I can carry forever. I worship fashion and designers, so most of my clothes are with me for my whole life.
After returning to Moscow, I went to the boutique immediately. My communication with the managers was not successful, but I couldn’t help but start thinking about this issue. Most people today are completely unaware of the serious problems affecting counterfeit fashion goods, particularly within the designer handbag and accessories market. How are consumers supposed to know the difference between a real, authentic designer bag and a fake one?
I usually tell this as a funny story when we discuss fashion with someone. As a response I usually hear, “Oh, dear, we heard of it! We know for a fact that some boutiques, especially in CIS countries, mix real and fake items, to put some money in their purse.” So, whateverybody knows about it and nobody does anything about it?
It turned out that someone did. I recently participated as a mentor at the Startup Secret Santa event. To my great surprise, there is a blockchain technology that can protect the authenticity of the brand. The identity is assigned to its owner, tokenized and stored on the blockchain.
How does it work? The Swiss startup collectID equips products like handbags with encrypted NFC tags containing a unique identity (UID). This UID is stored as a token on a blockchain and assigned to the respective owner (a brand, a logistic specialist, a retailer or the final customer). This combination of software and hardware is truly tamper-proof and prevents products from getting counterfeited. A consumer simply scans the built-in NFC tag in their product with their smartphone and immediately sees whether the product is authentic or not. Brands can place additional content on their products and thereby combine their physical and digital worlds and create a unique experience for the consumers.
There are other solutions to the counterfeiting problem that follow a similar approach. Some of them also use NFC tags (i.e. Blue Bite) but lack the immutability of a decentralized blockchain protocol that ensures that it was really the original brand that confirmed the authenticity of the product. With such a solution, consumers still need to trust a middleman. Other solutions connect consumers directly with brands using blockchain technology (i.e. Arianee) but do this by using insecure QR codes that can easily be copied and linked with a fake product.
The disappointment I felt at Louis Vuitton was truly heartbreaking. Since this day, I never have been able to buy at a luxury boutique worry-free. But finally, there is a solution. I am sure that sooner or later it will become a market standard that will revolutionize the fashion industry.
Maria Stankevich is the CBDO at the EXMO cryptocurrency exchange. Journalist turned digital account head, turned head of communications, she managed PR and digital communications for big institutional players. Three years ago she joined the EXMO team, first as the head of communications and then as CBDO. In 2019, she won the award, “Top Person of the Year in Blockchain and Crypto,” according to the international Blockchain Life event. Now for EXMO, Maria manages new markets, listings and IEO services, partnerships with banks and payment systems and VIP sales.
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