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Cryptography is crashing, but the technology behind it could save billions of dollars in luxury brands

(CNN)Counterfeit products are a big problem for high-end designers around the world. Luxury brands have lost the value of$ 98 billion. Sales to counterfeit products in 2017 alone.

These losses can damage both profits and reputation. That's why some brands are looking to technology to protect their products, brand value, and consumers.

Despite being a competitor, the luxury brand conglomerateLVMH (LVMHF)isPrada (PRDSY), and Cartier founded theAura Blockchain Consortiumin April 2021 to "designer" Product digital twin ". The
blockchain is adigital ledgerand cannot be edited, modified or tampered with. This is the same technology that underpins cryptocurrencies whose prices have plummeted recently. However, there are many other applications. Aura uses this to provide luxury products with unique digital identifiers that help customers verify that their purchases are genuine.

"Blockchain is a very fast-moving technology and very complex," said Daniela Ott, Secretary-General of the Aura Blockchain Consortium. "Everything about Aura is to make blockchain easy for luxury brands."

To date, over 20 brands have used Aura's software and the platform is 1,700. Over 10,000 products are registered, says Ott.

"These brands are competitors in all other respects, but we are working with this technology to move this forward faster in the safest way," she says.

"Traceability and Trust"

Aura's software for creating "digital twins" of physical products such as shoes and handbags is based on material types and sources. , Where and when it was created, and how many were created.

According to Otto, this allows consumers to use "bank-level encryption" to act as a "non-counterfeitable" digital certificate, giving consumers a higher level of proof. And you can get protection. Accessed from web pages and mobile apps, she says, provides more insight into the origin of the product and enhances "traceability and trust" in the sustainability and ethical issues of conscious consumers. ..

However, blockchain has its limits. The reliability of the information is the same as the input, Ott said, "If the brand does not have a good relationship with the supplier, the blockchain will not help."

Sustainability is It is an important concern for the consortium. As a private blockchain built from scratch, Aura usesless energy than its public blockchainplatform controls the information shared by brands and brand and consumer data. You can also keep your brand safe, Ott says.

Aura released cloud-based software in early 2022. Ott says its plug-in technology will allow brands to integrate their products into their existing operations with "zero blockchain knowledge."

And more brands are participating. Designer streetweargroup OTBbecame a founding member in October 2021 and last month diamond and gem specialistsSarine Technologiesalso joined the consortium. According to Otto, the founding members contribute to development costs and have more say in governance, but all members pay for software services and license fees for each digital twin manufactured.

Trendy technology

Other fashion brands also use blockchain tools. Audemars Piguet and Vacheron Constantin join the Paris-based open source blockchain platformArianee,Karl Lagerfeld's photo archivecertified byLukso Network'spublic blockchain It has been.
Creating a digital ID can become increasingly important for second-hand luxury resellers.Fast-growing marketsOnline platforms such as the rarely wornandVestiaire CollectiveProducts must be certified before they can be sold. This is a multi-step process that includes both digital and physical checks, says Victoire Boyer Chammard, Global Head of Authentication for Vestiaire Collective.

“Forgery has been around for decades and is constantly evolving,” says Chammard. Vestiaire's team of 60 authenticators will check digital documents, including photos, before examining each item. AI and blockchain could help accelerate the digital authentication process, Chamanrd said, adding that this would help human certifiers rather than replace them.

"Professionals need to perform a physical examination to verify all digital data," she said, and resellers can easily inform when luxury brands use the same technology. He added that it would be useful to access and use. ..

Blockchain can be useful beyond fashion, Ott says. Luxury sectors such as art, cosmetics, perfumes and furniture may benefit. In the future, the ledger may also retain information about product maintenance and maintenance, helping to better determine the value of a product for resale, Ott said. A recent addition to the

Aura Consortium is the German car makerMercedes-Benz, who joined as a founding member to explore different aspects of digital branding using the platform. intend to do something. Creating an NFT (Non-Fungible Token) for an in-car digital art experience.

“Our measure of success is to adopt all luxury brands,” says Otto.