Counterfeiting is an absolutely massive industry, logging in trillions of dollars every year. It can be a big threat both to consumers who unknowingly purchase these products and retailers as well looking to sell legitimate products. Blockchain, however, might hold the key to solving this issue of forgeries by providing a virtual “paper” trail
Counterfeiting is an absolutely massive industry, logging in trillions of dollars every year. It can be a big threat both to consumers who unknowingly purchase these products and retailers as well looking to sell legitimate products.
Blockchain, however, might hold the key to solving this issue of forgeries by providing a virtual “paper” trail that confirms the validity of products. One company, Yaliyomo recently crafted a blockchain solution called the Y Platform for this very purpose. This platform is specifically built to battle back counterfeits, especially in the luxury goods industry, which sees 60 to 70% of all counterfeit sales.
Mobile Payments Today spoke with its CEO Nihat Arkan to learn more.
Q. Why did you decide to build a blockchain solution?
A.We were looking at practical applications of blockchain technology beyond what people currently understand as a tool involved in cryptocurrencies; since it has a lot more applications as well. Ultimately there are two advantages to blockchain-backed technology that make it useful.
First, it is the most secure data/content technology available and, at the same time, gives consumers and retailers shared ownership of their content. That’s unique and a really important feature, as it is core to how blockchain can help build trust between seller and buyer. It also really helps companies manage data compliance, as well.
The second reason — and this is critical to any business with a supply chain really — is that blockchain gives you the ability to keep “historical” data. It prevents old data from being deleted. When a piece of information in the database is changed, instead of overwriting as currently happens, a copy is made instead. The data owner can trace back all those copies right to the original. That kind of usability isn’t available from any other technology or process on the market.
Q. What are its primary functions?
A.So, Y platform has a few central functions.
The first one is its ability to confirm the authenticity of any product that a brand owner or retailer offers to market. Second, by securing that authentication, it prevents forgeries and counterfeit products from entering the market and posing as “the real thing.” This is important in industries that are prone to fakes — where companies are losing billions of dollars. The increased pressure from the growth in fake products is even starting to put jobs at risk.
One of the other great functions of Y is that it gives brands a new way of keeping in touch and communicating with the consumer base. Shared ownership of data creates that — helping consumers understand the history and provenance of their products, and assisting retailers to understand the behavior and preferences of their consumers.
Q. What are its benefits for retailers?
A.Consumers are increasingly conscious of product provenance — “where did this come from, and how was it made?” Because Y allows a brand or a retailer to track that story back as far as they want, and because there is full transparency of that content. Remember once added, everyone can see any changes, and this helps improve consumer trust, which in competitive markets is a huge advantage.
Also, being able to maintain a long-term connection with customers through the Y platform helps retailers to understand customer behavior in the “post-sale” environment. This is important in sectors where re-sale is a big part of the market. Y encourages customers to pass on digital ownership to new owners, creating a product story that all users, and retailers, can access. It also helps retailers with future upselling and building a long-term relationship with their customers. This is common in more luxury markets, but Y helps to systemize that and extend it beyond the first buyer.
It also means — again because of the built-in safety of a blockchain-based system — that Y improves the ability of retailers to protect their brand integrity. With the system, companies can say, for sure, “Yes, this is a real product, or no, this is not one of ours.” We know that traditional authentication methods aren’t preventing fakes, but by turning that “authentication” process into a data/content record, and locking it down in blockchain, we’re aiming for a new system that does prevent the majority, if not all, counterfeiting of goods.
Q. Where do you see blockchain going in the near future?
A. There is a sense that blockchain is “that crypto thing”– it is not very well understood by a lot of people at the moment. But within five years — in my view, we will see it as a very mainstream way of managing content —used by business and government. Blockchain can help with some of the big, shared we all face, where having data transparency and security is vital. I’m thinking in particular about consumer concerns around data security, but it applies to a vast number of areas.
Q.When do you think we will see widespread blockchain adoption?
A.We are beginning to see adoption by some large companies at the moment, and I think within five years, and certainly, within this decade, we will see what is called distributed ledger technology — DLT (a type of blockchain) replacing most of today’s data recording/distribution platforms. In my view it is inevitable — we have the technology and the advantages are obvious. It is inevitable.
