In December of 2017, the price of Bitcoin rose to an all time high. The event caused a lot of commotion and numerous people rushed to cash in on this opportunity. People sent hundreds of dollar on hardware to mine Bitcoin. While that was impressive by itself. The event also popularized blockchain technology in a way that had not been done before.
But, what are blockchains?
Blockchains are distributed ledgers. Every set of record is identified as a block. Each block contains it’s own data, a code of it’s own and the code of the previous block. The code is like a fingerprint and can be used to identify blocks because it is always unique. If someone attempts to make any changes to the block, the code will change and one will know that it has been tampered with.
Another reason that blockchains are very secure is that they are decentralized and distributed. This makes it very hard to crack the code with brute force since one will need to repeat the process for every member of the blockchain.
It can also be used to maintain other, simpler records!
For example: De Beers, the diamond multinational brand utilized the tech to track the movement of 100 very valuable diamonds. All the way from mine to retail last year. They developed a blockchain based platform called Tracr for the purpose. It was done in conjunction with five different diamond merchants. The 100 diamonds used last year for the testing were a part of the pilot program.
So, why am I mentioning all this?
Well, that is because Moët Hennessy – Louis Vuitton SE or LVMH has decided to create a similar blockchain platform. They plan to use it to track their luxury goods and verify the authenticity of the items. They have named the platform AURA. In order to create the platform, they have formed their own blockchain specialist team. In addition, they are also working with ConsenSys and Microsoft Azure. ConsenSys is the studio that designed Etherium, a popular cryptocurrency.
When Coindesk interviwed a source close to the project, they received the following statement:
“To begin with AURA will provide proof of authenticity of luxury items and trace their origins from raw materials to the point of sale and beyond to used-goods markets. The next phase of the platform will explore the protection of creative intellectual property, exclusive offers, and events for each brands’ customers, as well as anti-ad fraud.”
A news release by LVMH themselves also mentioned the following:
“AURA makes it possible for consumers to access the product history and proof of authenticity of luxury goods — from raw materials to the point of sale, all the way to second-hand markets.”
Even the folks at ConsenSys had this to say to about the AURA:
“AURA is a ground-breaking innovation for the luxury industry. ConsenSys is proud to contribute and to work with LVMH on an initiative that will serve the entire luxury industry, protecting the interests, integrity, and privacy of each brand.”
Why is this so important?
It is important because traditionally, luxury goods have always been heavily dependent on trust. That is because they have a very high value and therefore need a third party to validate their authenticity. Let’s just say that it does not always go very well.
All this has even lead to the establishment of a black market that deals in counterfeit goods and has quite the global influence. The counterfeits on the market fetch exorbitant rates and cause losses for thousands of customers worldwide. The worth of the Black Market is $3 trillion USD. All of this is essentially lost revenue for the luxury brands out there. Therefore, it is quite logical that they desire something like AURA to protect their wealth.
Who will be able to use AURA?
LVMH plans to initially keep AURA limited to its Christian Dior and Louis Vuitton brands. But, they do plan to eventually roll it out for every luxury brand out there to use. Now, whether their rivals will do that or not is an another story altogether. But, we can all look forward towards a safe and secure future when it comes to our six figure items!