Blockchain-based Fake Product Detection. Fake product detection using blockchain technology offers a groundbreaking solution to the growing issue of counterfeit goods. Blockchain’s decentralized, immutable ledger provides a secure way to verify the authenticity of products at every stage of the supply chain. Recording each transaction and transfer of ownership on the blockchain ensures transparency and traceability, making it difficult for counterfeit items to enter the market. Through blockchain records, consumers can easily verify product origins and authenticity, enhancing trust and confidence. This innovative approach protects consumers and safeguards brand reputation and integrity in various industries.
Importance of Supply Chain Transparency
Preventing the spread of counterfeit products relies heavily on supply chain openness. So, companies must guard against ruining their name and reputation by counterfeit products. People and real companies alike are feeling the effects of the counterfeit product crisis. From fake gadgets and pharmaceuticals to fake designer purses and apparel, these products can be dangerous and often of poor quality. False electronics, for example, pose serious risks such as electrocution or fires. The 2016 explosion of a man’s cell phone in Malaysia was determined to have been caused by a counterfeit Samsung phone.
Another big issue in underdeveloped nations is fake medications, which may be just as deadly as they are ineffectual. One hundred people in Pakistan, for instance, perished in 2012 after ingesting counterfeit heart medication. A web store was sued by Hermes in 2017 for selling knockoff Hermes bags, which tarnished the luxury label’s image.
Businesses that sell authentic goods suffer financial and reputational losses when customers unwittingly purchase counterfeit goods. People must be alert to this issue and take precautions to avoid buying fake products.
How Does Blockchain-based Fake Product Detection Work?
By providing an immutable and transparent record of the whole supply chain, blockchain technology may help track and confirm the legitimacy of items and enable the rapid detection of any fraudulent behavior, all of which can lead to the discovery of counterfeit goods.
Blockchain technology can help find and stop the sale of fake goods by making the supply chain more transparent and enhancing traceability. By recording every transaction and movement of a product on a distributed ledger, blockchain creates an unchangeable and transparent record of a product’s journey from manufacturer to consumer.
An example that comes to mind is pharmaceutical supply chains. The World Health Organization reports that both developing and industrialized countries suffer from the problem of counterfeit medical products, with one out of ten products being medications. False drugs can be more easily detected and prevented from being distributed if a secure and transparent medication supply chain is established utilizing blockchain technology.
Each transaction along a blockchain-based supply chain creates a public and immutable record of a drug’s movement. Protecting the records with cryptographic hashes makes it nearly impossible for unauthorized parties to change them covertly.
Another use case for smart contracts is automating validation and verification along the supply chain. This ensures the product has not been altered or deviated from its original route. Smart contracts can notify users immediately if a fake product is found, allowing quick action to halt its dissemination.
If we take the pharmaceutical industry as an example, we have MediLedger, a blockchain-based system created by Chronicled. MediLedger uses blockchain technology to record every prescription transaction in an immutable and transparent ledger, following the medication from manufacturer to customer. Protecting patient safety and drug efficacy, this technology detects counterfeit medications and removes them from the supply chain.
Some phases in a traceable medical supply chain that uses blockchain technology to stop the spread of fake medications are as follows:
- The pharmaceutical manufacturer also records the steps to make and package the drug on the blockchain.
- Distributor: After that, the medication is sent to the distributor, who logs its arrival and transit on the blockchain.
- The wholesaler receives the drug from the distributor, verifies its authenticity, and tracks its movement on the blockchain.
- The pharmacy verifies the medication’s authenticity and tracks its blockchain activity after obtaining it from the wholesaler.
- The final consumer can verify the medicine’s authenticity by scanning the blockchain-based QR code on the container.
Thus, blockchain technology enables full supply chain tracking, making detecting medication fraud or tampering much easier. This can help find counterfeit drugs and stop their distribution, guaranteeing that only authentic treatments reach patients.
Benefits of Using Blockchain for Product Authentication
Consequently, blockchain technology enables full supply chain tracking, which greatly facilitates detecting any manipulation or fraud involving medicine. By doing so, we can help limit the spread of counterfeit drugs and ensure that only authentic treatments reach the people needing them. Blockchain technology can improve product identification by making the supply chain more transparent, secure, and traceable to combat the spread of fake goods.
Since blockchain records are transparent and immutable, no one can remove or change the data that has been added to the blockchain. Therefore, blockchain is a great option for monitoring product integrity and ensuring it hasn’t been altered.
Additionally, blockchain technology provides high security by encrypting data and preventing unauthorized access through cryptographic protocols. Thus, the data kept on the blockchain is guaranteed to be secure and unchangeable. The fact that any entity does not control the blockchain indicates that it is decentralized. This provides an extra layer of protection, making it harder for hackers to breach and control the system. Furthermore, blockchain technology allows tracking things from origin to destination. The complete history of the product will be visible to all parties involved in the supply chain, allowing them to verify its legality.
Blockchain technology saves time and energy by automating authentication, which means less human verification is required. This improves supply chain efficiency and reduces the likelihood of human error. In addition, businesses may gain client trust by using blockchain technology to verify products, which provides a transparent and safe way for customers to certify the integrity of what they buy. Potential outcomes include higher sales and increased customer loyalty.
Role of Digital Identities in Fake Product Detection
Digital identities can help discover counterfeit goods by assigning each product a unique identifier. This will make it easier to monitor the items’ whereabouts along the supply chain and confirm their authenticity, halting the spread of counterfeit goods.
The widespread problem of counterfeit goods in today’s e-commerce era threatens customers and manufacturers. However, using digital identities can be pivotal in the fight against introducing counterfeit goods to consumers. Registering a product with a digital identity is one safe and dependable way to verify its provenance and ownership. This allows manufacturers to create a verifiable record of its validity.
This record can help stop the entry of fake goods into the market because technology makes it easier to trace and certify the authenticity of things. Using digital IDs, it is also possible to trace the journey of items from producer to consumer.
The product’s journey can be better tracked and managed with enhanced transparency and openness across the supply chain. Consequently, this can help stop counterfeit items from reaching consumers by identifying and investigating any problems in the supply chain.
Building on the previous discussion of counterfeit medications, let’s examine the potential applications of digital identities in healthcare. For example, pharmaceutical companies can create digital identities for each batch of medication they make. These identities can include information like the manufacturer, the date of creation, and the medication’s unique serial number.
Storing this digital identity on a blockchain might create an immutable and unbreakable record of the medicine’s legitimacy. Users can take full control of their identities and make them self-sovereign by storing their credentials on their devices via decentralized storage. This ensures that users are not restricted to using just one platform and promotes increased interoperability.
Digital identification could be used by hospitals, pharmacies, and other supply chain participants to verify the validity of medicine before it is distributed to patients. This might be useful in stopping the spread of counterfeit drugs that could hurt people. By tracing them as they go through the supply chain, digital IDs can also help monitor and manage the flow of drugs more efficiently.
Companies Using Blockchain for Product Authentication
Numerous companies, including Everledger, Provenance, Chronicled, and Walmart, have adopted blockchain technology for product verification. Some ways these businesses are implementing blockchain technology to verify the authenticity of their products are as follows:
Walmart
In the US, Walmart uses blockchain technology to monitor the food supply chain, which includes mangoes. With blockchain technology, Walmart can trace an item’s origin and monitor its progress through the supply chain, reassuring consumers that their purchases are genuine and transparent.
Everledger
In the US, Walmart uses blockchain technology to monitor the food supply chain, which includes mangoes. With blockchain technology, Walmart can trace the origin of an item and monitor its progress through the supply chain, reassuring consumers that their purchases are genuine and transparent. The company Everledger creates digital identities for valuables like diamonds using blockchain technology. To verify the authenticity of a diamond, customers can utilize their platform to look up its digital identifier. This identification includes information on the diamond’s cut, carat weight, and place of origin.
Chronicled
Chronicled uses blockchain technology to ensure the authenticity of high-value items, such as pharmaceuticals, luxury goods, and more, and to reveal all links in the supply chain. Its software allows companies to track a product’s entire supply chain, which provides customers with assurance and transparency.
Provenance
Provenance uses blockchain technology to provide supply chain transparency. With its software, companies can track a product’s journey from raw materials to a completed good, providing buyers assurance and transparency.
Challenges of Blockchain-based Fake Product Detection
Despite its many benefits, the high implementation cost, restricted scalability, and the necessity for compatibility between multiple blockchain networks are some constraints and problems that must be considered when considering blockchain-based product authentication.
Developing a blockchain-based system can be quite costly, and additional costs may be associated with staff training. Another challenge is the need for technical expertise to develop and manage a system that relies on blockchain technology. This may necessitate highly specialized skills in short supply within a certain industry.
Product authentication via blockchain technology has scalability issues. The blockchain size could grow substantially as more products are added to the system, leading to slower processing times and higher transaction fees. However, because blockchain isn’t standardized, it can be hard to integrate with existing systems. This can be a problem for companies that want blockchain technology for product authentication.
Another issue with blockchain-based product authentication is data privacy. Even while blockchain technology provides an unbreakable ledger of transactions, protecting personal information is still an issue. Companies are responsible for ensuring that all data collected and stored adhere to relevant privacy regulations.
Another concern is the acceptance and uptake of blockchain-based product authentication. Suppliers, distributors, and customers are just a few of the stakeholders who might be hesitant to embrace blockchain technology yet, which might limit its effectiveness.
Blockchain Technology’s Future Directions
Other possible future uses for blockchain technology include product identification across industries, interaction with IoT devices and AI, and product authentication, which has already demonstrated promise. One option is to develop more advanced blockchain-based systems to communicate with other tech like AI and the Internet of Things (IoT). If this allows for more advanced tracking and authentication of things across the supply chain, there may be less opportunity for fraud, forgeries, and other forms of product tampering.
Distributed ledger technology (blockchain) may also help with product authentication as decentralized markets expand. These markets would utilize blockchain technology to streamline transactions and eliminate intermediaries like banks or payment processors. This could lead to more openness, lower transaction costs, and a trustworthy infrastructure.
Blockchain technology could improve food traceability and safety. By monitoring the whole supply chain; companies can guarantee that food supplies are safe, of good quality, and delivered at the peak of freshness.
In addition, blockchain technology can open up food goods regarding their origin and manufacture, increasing consumer trust and the product’s value. Blockchain technology offers many further prospects for product identification beyond these examples, particularly in the pharmaceutical, luxury, and electronics sectors.
By maintaining an immutable and verifiable record of all financial transactions, blockchain technology can boost economic efficiency, protect consumers against fraud and counterfeiting, and reduce the likelihood of fraud and counterfeiting.
