Counterfeiting prevention Luxury brands are increasingly dependent on blockchain technology | 07/08/22

• Blockchain technology to protect luxury brands
• “Digital twins” for design products create transparency in the supply chain
• Digital branding useful beyond the fashion industry

The recent cryptocurrency has shaken massively confidence in cryptocurrencies. The technology behind Bitcoin & Co. considered, however, to be safe and can help protect design products.

Counterfeiting has long been a major problem for manufacturers of many luxury brands. According to CNN, luxury brands lost $ 98 billion on counterfeiting in 2017. In 2020, the German customs alone confiscated branded goods worth about 29 million euros. In addition to financial losses, counterfeiting means damage to the image of luxury companies. So it is no surprise that luxury brands are now looking for digital ways to protect their products.

Digital twins using blockchain technology

Blockchain technology could be such a technology because it is a digital ledger that cannot be tampered with. Each transaction is recorded on the blockchain. In 2021, the luxury groups LVMH, Prada and Cartier therefore joined forces and founded the Aura Blockchain Consortium, where Mercedes Benz recently joined as another founding member. It is a non-profit, private blockchain on which “digital twins” of the branded products can be created to certify the authenticity of the designer products. Using blockchain, the luxury products from the currently 20 brands get a digital identifier to ensure that they are original products.


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Ethereum-based technology offers “bank-grade encryption” that is impossible to counterfeit, Daniela Ott, general secretary of the Aura Blockchain Consortium, told CNN Business. The digital certificates can be accessed through a website or app that not only provides conscious consumers with information about authenticity, but also about issues of sustainability and ethics. However, Daniela Ott also sees limits here: data is only as reliable as the person entering it. A blockchain only helps those brands that also have good relationships with their suppliers.

Sustainable goals

On the website you can read that Aura is an association of luxury companies with a “higher purpose”, a non-profit organization that invests in technologies to ensure transparency and trust in luxury brands in the future. Blockchain records not only the authenticity and ownership, but also information about the product throughout the production cycle, such as the material, the origin of the raw materials, the place and time of manufacture and the quantity of products produced. This ensures the authenticity, ownership and traceability of the products and provides transparency in the supply chain.

Above all, sustainability is a concern for the Aura Blockchain Consortium, can be read in a Twitter message. Therefore, they joined the SMI Fashion Task Force. According to the company, Aura blockchains’ energy consumption is far lower than public blockchains.

Future development

The partners’ NFT collections, such as Prada’s new Ethereum-based “Timecapsule NFT Collection”, are also presented on Twitter. A limited edition of t-shirts and shirts have been sold in this “time capsule collection” since 2019 in collaboration with various artists such as Zach Lieberman or Cassius Hirst, now each owner should receive a similar NFT.

Aura’s one-year anniversary celebration in Paris unveiled a new ecosystem partner Ledger, the world’s largest Web3 hardware wallet, along with new NFT products that allow individual brands to give away NFTs or create their own NFT showcase Offers.

Other well-known brands are already using blockchain platforms like the public blockchain Arianee to verify their products. The fast-growing luxury second-hand market can benefit from digital certification. The luxury products need to be authenticated in several online marketplaces.

Furthermore, the information about a product on the blockchain can be expanded as desired in the future, eg with regard to maintenance or servicing of technical devices or cars, and thus help to better determine the value of a product.


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