We explored the possibilities that the blockchain may offer in journalism in a previous post in 2018. Then, two years ago, we also looked at how French luxury goods conglomerate Louis Vuitton Moët Hennessy (LVMH) was exploring the blockchain and had invested millions to establish the AURA platform.
Developed over a year in collaboration with Microsoft's Azure platform and New York-based software technology company and Ethereum design studio ConsenSys (also linked to the Civil Media Co. project for a new journalism economy using blockchain), AURA used a permissioned version of the Ethereum blockchain known as Quorum, developed by JPMorgan and focused on data privacy.
Thanks to the ERC-721 non-fungible tokens (NFTs; ERC-721 tokens arrived at the end of 2017 with the CryptoKitties, one of the first blockchain games), the technology was mainly developed to prove the authenticity of high-priced luxury goods.
Years passed and it was just announced that other fashion companies showed an interest in the technology, yet, rather than competing to establish their own platforms, the Prada Group and Compagnie Financière Richemont decided to join LVMH in the AURA Blockchain Consortium (the following companies area already keyed into the platform: Bulgari, Cartier, Hublot, Louis Vuitton and Prada).
Which are the actual benefits of the blockchain for fashion and in particular of the AURA platform? The blockchain network can be used for different purposes in a wide range of industries: as a system it can be employed for example in the medical industry to store health records. Fashion-wise it can instead be used to authenticate products - from garments to accessories.
You could easily fit a handbag with a very affordable microchip that would allow you to register the bag on the blockchain and show in this way the chain of ownership. This would allow to establish where the item was originally purchased, who is the legitimate owner of the bag in case it gets stolen and to register the transfer of the ownership in a legitimate way from one person to another at a resale. In this way it would be easier to determine if that specific product is authentic, something that may facilitate further sales and auctions as well and discourage fraud and the sale of stolen luxury pieces.
Many luxury brands protected their products with serial numbers, watermarks, holograms, barcodes and RFID technology. Too often, though, such attempts proved to be ineffective, as a hacker may have been able to corrupt such data or database. Whereas no one can alter, lose or destroy records on blockchain systems. That's why the blockchain seems to be the perfect system to facilitate luxury authentication processes.
Yet the blockchain is not just about authenticity: the groups that joined the AURA blockchain want to give their consumers a message about responsible sourcing, traceability along the supply chain and sustainability as well. The blockchain allows indeed a company to track the raw materials and original components employed to make a product.
Consumers will therefore be able to discover the story behind a product from the AURA certificate that they will receive when they purchase a product. In this way fashion houses also hope to win back those consumers who stopped buying their brands as they didn't see any transparency when it came to sources and sustainability. The platform is open to all those luxury goods that align with principles such as quality, traceability, transparency and authenticity, including cars, jewelry and watches (and for what regards some of these products the blockchain may provide a genuine change - a jewelry maker could indeed use the blockchain to state the provenance of its diamonds and highlight in this way its ethical commitment).
At the time of writing companies are just preparing for the AURA blockchain: Prada hasn't launched its consumer-facing app and dedicated online environment, but it has already embedded radio-frequency identification chips into its products, and consumers will be able to link them to the app when it's ready.
This collaboration is interesting not just because of the benefits the blockchain may offer to luxury houses, but for the fact that these groups decided to use one single blockchain solution open to different brands worldwide. Fashion is a competitive business, but in this case it seemed more logical to team up rather than fight. Actually the consortium may grow even more as the groups involved claim they are already in talks with small and independent brands (it is worth noting that participating brands pay an annual licensing fee and a volume fee, but the consortium is not-for-profit and those who join in can still be using other authentication platforms as well - for example, Richemont also uses the Arianee digital passport platform for valuables for some of its watch brands). Who will join the AURA Consortium next? Time will tell, but this is the final proof that the blockchain is now considered by the fashion industry as an established and reliable resource.
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