Blockchain technology tracks asset ownership and eliminates product counterfeiting and smuggling

Counterfeiting and smuggling of stolen goods are significant problems in global trade transactions. According to The Economist magazine, the total value of counterfeit goods sold worldwide is estimated to be as high as $1.8 trillion each year.

The production of fakes causes huge losses to manufacturers, who do not even consider the loss of credit to consumers. Moreover, the resale of stolen items also causes losses to consumers and insurance companies. Every year, the insurance industry pays an average of about $150 million in jewelry theft premiums.

The problem is that there is no way to truly trace and verify the authenticity of goods. Due to historical and traditional reasons, many industries still use paper materials to prove the authenticity and actual owner of assets. But paper materials can be changed and lost. When buying a ring from a jeweler, the relevant certificate issued does not fully explain the authenticity of the ring.

Before the advent of blockchain, this problem has always been difficult to solve.

An essential feature of blockchain is that the information recorded on the blockchain can never be tampered with or forged. Moreover, the technology is also widely used as a tool for proof of ownership. The asset information recorded in the blockchain cannot be changed unless it is verified by the owner.

One company is trying to accomplish this, and it is Everledger, and its first target market is the diamond industry. Of course, diamonds themselves cannot be stored on the blockchain, but the serial number and related data of diamonds can be recorded on the blockchain to prove the true owner of the diamond.

By analyzing the color, purity, size and carat of diamonds and dozens of other attribute parameters, such as crown height, circumference, surface size, cutting points, depth and angle of corners, etc. These data can be used to digitize the information of diamonds so that they can be recorded in the blockchain.

Once the item is digitized, it can be stored on the blockchain. With all this data, the ownership of the diamond will also be recorded.

The market loses trillions of dollars every year to counterfeit goods. Right now, it’s really hard to tell whether a product is genuine or not. But if merchants start using blockchain to record their product information, it will become much more difficult for counterfeiters to produce fakes.

Blockchain allows users to view product information recorded on the blockchain and verify its authenticity in an easy-to-use way without professional skills. In this way, manufacturers will gain more profits, and consumers will also buy genuine goods.

Everledger is not the only company working to achieve these goals. In the sneaker market, Chronicled is also building a smart tagging system where sneaker information will be tagged and recorded on the blockchain. Consumers can confirm the authenticity of a pair of $300 LeBron James sneakers without worrying about buying fakes.

Verisart, which has yet to be officially launched, hopes to achieve the same goal in the field of art. By assigning a unique identification code to each piece of art, users can confirm the legitimacy of the artwork.

All of this work is done on the blockchain, which is a public, distributed, encrypted ledger that ensures that data cannot be tampered with. If paper proofs are used, they can be easily tampered with. Using blockchain means that thousands of computers jointly maintain a ledger to prevent data from being tampered with. And as blockchain develops, it will become increasingly difficult to change data.

Bitcoin is the first application to realize blockchain technology, and there are many other applications. However, only a few companies are currently working to prevent counterfeiting and stop the sale of stolen goods.