10.7.2024
“Amazon withdraws seven million counterfeit items from circulation,” writes The standard on March 26, 2024
“37 percent use counterfeit products — statistics of the week” headlines Heise online on May 30, 2023
In addition to direct violations of rights, the result is also an impact on image and security, especially when counterfeits spread on the secondary market.
In an increasingly globalized and digitized world, where counterfeiting and brand misuse are a serious problem, companies are looking for reliable technologies to securely connect and protect their products with digital information and thus maintain their brand integrity. While QR codes and NFC chips are widely used technologies, new solutions such as those from Authentic Vision, Tokiphy and Dynamic Element, which can also use Distributed Ledger Technology (DLT), have significant benefits. All data in a public DLT network can be validated at any time and, due to its authenticity, offers the highest level of evidence. In this blog post, we compare these technologies with traditional QR codes and NFC chips in terms of their use in brand protection, product traceability and liability, as well as the implementation of customer loyalty programs and connection of the Digital Product Pass.
Brand protection is one of the most important tasks of a company in order to maintain its uniqueness and reputation. Counterfeiting and brand piracy threaten the success of every company, and in many industries, such as the luxury goods sector, this can result in significant financial losses. However, decentralized storage technologies, such as blockchain, offer promising solutions.
By using blockchain, certificates of authenticity can be stored inalterably and transparently. Once stored on the blockchain, these certificates cannot be manipulated, which makes the authenticity of a product undeniable. This technology allows consumers and companies to verify the authenticity of a product at any time, making it much more difficult to exchange counterfeit goods and strengthening brand protection.
Product traceability is key to monitoring a product's supply chain. Consumers today demand greater transparency, and companies must ensure that their products are manufactured and delivered ethically and lawfully. By implementing decentralized systems, the entire supply chain of a product can be monitored in real time.
Decentralized storage offers the advantage that data, such as geolocations and production processes, is stored securely and unalterably. Every movement of a product can be documented and made comprehensible. In the event of a problem, companies can quickly and efficiently identify the affected batch and take steps to minimize the damage.
One practical example is the food industry. Here, traceability plays a crucial role in food safety. By using decentralized systems, all production and transport data can be traced back to the end user, which strengthens consumer trust and increases security.
Product liability is another critical issue that requires companies to ensure that their products are safe and error-free. A breach of product liability can result in significant legal consequences and claims for damages. Decentralized storage technologies also provide valuable support here.
By storing geolocations and production data on the blockchain, companies can provide detailed evidence of the production and delivery process of a product. Should a product ever be defective, it is possible to quickly and verifiably determine at which point in the supply chain the fault occurred. This not only minimizes risk for companies, but also strengthens consumer trust in the brand.
QR codes (Quick Response Codes) are two-dimensional barcodes that can be scanned with a smartphone to transfer information quickly and easily. They are inexpensive, easy to implement, and widely available. Companies use QR codes for authentication, product tracking, and marketing purposes. However, QR codes have some disadvantages, such as being easy to copy, transfer and falsify. Why QR codes are not suitable for proof-of-location is in the blog post Free soccer tickets described; analogous considerations also apply to proofs of authenticity.
NFC (Near Field Communication) chips offer another way to verify and track products. They enable wireless communication over short distances and are particularly popular in smartphones and contactless payment systems. NFC chips offer a higher level of security than QR codes because they are harder to copy. However, they are more expensive and sometimes require special readers, which can increase implementation costs. Experienced attackers can read NFC chips, destroy them from a safe distance and even overwrite them, depending on the security level.
Authentic Vision uses a unique, patented fingerprint technology with randomly generated holograms, which provides a secure and non-replicable method of product verification. Each product is provided with an individual hologram, which can be scanned with your own Meta Anchor™ app (or SDK) to instantly verify its authenticity. Optionally, a specially developed smart contract can also be used to DLT connect a digital soul™ of the product, which is inseparably linked to the product.
Tokiphy uses blockchain technology to verify wallet identities and token ownership. By binding a smart card or a special NFC chip token to a wallet, Tokiphy offers a secure and tamper-proof method of authentication. This can be used in two ways: On a chip in the form of a credit card, a Web3 wallet can be managed for the end customer without the end customer having to deal with the technology. However, such a chip can also be applied to any product, which means that the product itself receives a wallet and can hold a digital product passport as a digital asset, for example.
Dynamic Element validates a product using macro images of the interface or an applied QR code, which thus becomes an SQR code. The reference images and every scan carried out are documented invariably in a public DLT network. The patented technology is even robust against minor injuries to the validation area and is found, for example, in Smart Stamp their application for decentrally stored certificates of authenticity of works of art.
Through dynamic content management and DLT, companies can create customized customer loyalty programs where customers earn points through interactions and purchases, which are stored securely and transparently on the blockchain.
Choosing the right technology for brand protection, product traceability, and liability depends on a company's individual and specific needs and resources. While QR codes and NFC chips offer a cost-effective and simple solution, they have weaknesses in terms of security and anti-counterfeiting. In comparison, all 3 technologies presented offer innovative approaches with significantly higher security standards and additional advantages such as non-copyable, non-falsifiable and non-transferable. All have advantages and disadvantages, which only come into effect with special requirements.
Thanks to the use of DLT, all 3 technologies are ideal for connecting a Digital product passport and for modern and efficient Customer loyalty programs be used. Raw materials used, production steps and entire supply chains can be stored transparently and retrievably in the DPP. For example, customers can collect points by owning validated products, which can be stored, exchanged and traded transparently and forgery-proof on the blockchain. This not only creates trust and strengthens customer loyalty.
Ultimately, companies should carefully consider their specific requirements and consider the costs, security, and usability of the various technologies to find the best solution for their brand protection, product traceability, and liability. Integrating DLT with these technologies offers significant benefits, particularly when implementing customer loyalty programs and proving transactions and interactions. The functionalities can also be gradually expanded and rolled out, but it is good advice if a roadmap is already in place before the start of such a project so that it can be taken into account when selecting the technology.
Let's find out together which of the 3 technologies presented - or even those from another provider - best suits your requirements and demands. Or would you simply like to find out more about the points raised? It's best to contact me right now.
