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A decade ago, no one would have thought we would spend millions on buying assets that are only seen digitally.
Blockchain technology has taken the world by storm in the last few years. Along with technologies, art is also considered important in the blockchain. That’s how non-fungible tokens (NFTs) came into existence. Art, music, physical assets, and collectibles are gaining power through such mediums.
In the creator's economy, be it physical or digital, the subject of provenance and authenticity is essential. The global counterfeiting market for luxurious goods was worth $1.2 trillion in 2018. Blockchain's core technology would be enough to maintain digital originality, but several advancements are needed to manage physical products.
With the digital NFT boom, physical NFTs now also have various benefits. A sense of owning something rare and authentic is what incentivizes people to buy an NFT.
NFTs have the potential to become more than just digital assets. Physical asset NFTs are tangible asses that are presented to the holder in the form of a physical benefit. This token takes up the custody of a physical asset. These physical NFTs can be resold as other NFTs. In such cases, the physical asset will be transferred to the new buyer.
With NFTs and blockchain-based supply chains, authenticity can be upheld for both digital and physical assets since all these NFTs are maintained on the blockchain by proof of authenticity architecture.
Counterfeit digital assets can be identified via tracking, but physical products cannot. For example, you can easily find a duplicate of Leonardo Da Vinci’s Mona Lisa painting or pirated versions of books anywhere. To control and cut off this market, blockchain is slowly gaining control of assets through NFTs and supply chain management.
According to an ASPA Report, ‘The State of Counterfeiting in India 2021’, counterfeit products are majorly found in five sectors. (Pharmaceutical, Currency, Tobacco, FMCG, and Alcohol). It is thus evident that most counterfeit products can affect consumers' health.
Several other sectors like software, electronics, and fashion also struggle with the sale of fake products. Fashion counterfeiting has become way more normal in the name of thrifting. The use of blockchain in India will certainly reduce the circulation of these fake products like in other countries.
Despite government measures to minimize counterfeiting, such products are still sold more than original products in many sectors. Brands are concerned about this and are looking for a solution.
Blockchain technology minimizes this issue by introducing promising ways to encourage the sale of original products:
These reasons make blockchain more trustworthy for both individuals and organizations while trading goods.
NFTs have become a more prominent asset in blockchain after currencies. Owing to their transparency, authenticity, and rarity, the use of NFTs has been growing ever since their inception.
Along with the digital storage of value, physical value storage is also increasing with NFTs. Brands are bringing their products into the NFT space to maintain quality and reduce fake assets. This way, they can sustain the brand's secret sauce, like Coca-Cola’s secret formula.
Due to the flexibility of NFTs, brands with the right vision of utilizing blockchain technology can mint their own NFTs. Industries are thus slowly adopting blockchain-based physical NFTs to ensure authenticity:
The emergence of blockchain technology is providing several solutions to various issues. With proper awareness and the right supply chain architecture, niche products will undoubtfully tackle the counterfeit market.
The decentralized ledger of blockchains allows the product data that entered the blockchain to be visible to the right people. Further, as the demand for the provenance of assets grows, visibility and solutions through blockchains will be improved.
Be it either organizations or individuals - blockchain technology will immensely benefit the end users. From cost reduction to maintaining genuineness, blockchain adoption serves as an aid in better product consumption.
