Simply put, a blockchain is a regularly updated database of time-stamped information. Data is updated and stored in ‘folders’ called “blocks”, and new blocks are formed regularly over time, for new data to be saved into. Different blockchains can contain different information, such as transaction history, product data and even proof of identity. Blocks are autonomously updated and stored online in a digital chain, visible for the whole world to see. The first proper use-case of blockchain technology arrived in 2009 in the form of Bitcoin, a cryptocurrency which allows users to send and receive money on the internet without using banks, borders or national currencies.
But now you know what a blockchain is, here’s why Louis Vuitton parent organization LVMH are adding themselves to the ever-growing list of business giants rapidly adopting the technology
As reported by BeInCrypto, the new LVMH venture has been named AURA and was created on JP Morgan’s new Quorom platform which is built on the Ethereum blockchain. It will provide proof of the authenticity of luxury items both to the customer and for internal use at LVMH. It will also trace the origins of the raw materials used to create each piece, depicting a digestible story and timeline of each individual product. Furthermore, AURA will keep track of exactly who is purchasing each piece at the point of sale, and will even go beyond and into the used goods market.
This will make it significantly harder to trade counterfeit product, as information stored on the blockchain is impossible to modify, only those with genuine goods can provide proof of authenticity to future buyers. No more fake certificates!
In the USA alone, 2017 saw a seizure of $1.38 billion worth of counterfeit goods. As the market for luxury items is at an all-time high and designers like LV are seeing healthy 10% growth in turnover year by year , also growing is the counterfeit market for those without the capacity to drop thousands on leather goods. An improved authenticity model should decrease illicit activity while providing a safer and more trusted environment for resellers and the used goods market to thrive.
Louis Vuitton and Parfums Christian Dior will be the first brands utilizing AURA, with the scope to expand into other LVMH owned brands and even competitors with a white label service. The next phase of the platform will explore storing and protecting intellectual property, exclusive offers, and events for partnered brands’ customers, as well as anti-advertising fraud.
While no one is going public with too much information, supposedly LVMH hired a full team of blockchain developers and experts to work on the project in secret for over a year alongside ConsenSys, a global blockchain technology company, and Microsoft Azure, a cloud computing service. The platform is expected to go live as soon as June or July this year.
With all this in mind, our prediction is that we’ll probably see a mobile app at some point which will allow users to input barcode or serial number data, and in return receive confirmation on whether or not that product is legit. If it’s authentic, you’ll also be able to see exactly where the leather came from, where it was taken for treatment and printing, where it was assembled and also a full purchase history including the first LV store it was purchased at; a digital breadcrumb trail of everything that’s ever happened to that specific product.