Fake products have been one of the biggest issues in many countries. Not only has it resulted in a loss of life, but it has also been the reason for the shutdown of many innocent companies. Many solutions have been introduced to identify these fake products, such as serial numbers, QR codes, and anti-counterfeit labels, but these bad guys have managed to duplicate these products in a way that it's very difficult to tell the difference.

What can be done to stop this menace?

Blockchain technology can put a stop to the consumption of counterfeit products by storing the details of the product and the one in possession of the product in the supply chain, on the blockchain system and tracking the product until it gets to the final consumer. This would enable traceability and authenticity of the product.

A blockchain database stores and records approved transactions in a block connected to a chain of other blocks. It is known for its immutability, transparency, and decentralization.

How do you identify fake products using blockchain?

Kiruika Company is a reliable cosmetics company located in the USA. They produce the best kinds of cosmetic products and deliver nationwide.

But it's surprising how this company always receives bad reviews from clients who get their products because the product either caused skin irritation or serious skin disease. They discovered that their products are being counterfeited, and in their search for a solution, they discovered the importance of blockchain in identifying counterfeit products and they want to adopt the idea.

Stage 1: Product Registration Process:

Kiruika Company will request a smart contract developer to add the product to the blockchain network using a Ganache app and a Web3 Ethereum wallet. This would be done in Solidity after which the QR code will be generated. The developer will enroll the product and manufacturer on the network, and the QR code is taken.

Stage 2: ship the Product to the Distributor

Here, Kiruiku Company will ship the product to the distributor. When the distributor receives the product, they will scan the QR code and update their details on the network, about product ownership, timestamp, and date without changing the already existing information.

Stage 3: Deliver the Product to the Retailer

At this stage, the retailer receives the product from the distributor and scans the QR code assigned to the product using a QR code scanner. They will also update owner details of the product on the network without changing the already existing information.

Stage 4: End User Authentication Process

At the end of the chain, customers will take the product, go to the website, and upload the QR code. The customer will be able to get all details about the product from the manufacturer to the last retailer. After getting details, their question will be whether to buy the product or not.

The Result

If the scanned QR code shows the details of the product, which includes the description, product name, manufacturer name, company name, unique product ID, and others, then we can say that the product is authentic.

If, by scanning the product QR code, it does not show any details, we can say that the data for the product does not present in the blockchain system and it has been counterfeited. So, we can say that the product is fake.

Use Cases

This innovative approach has already been adopted by many companies, some of which are:

Walmart: This company has always been into blockchain. They worked together with IBM to bring up this idea of identifying counterfeit products through blockchain in 2018 and have been supported by the Hyperledger Fabric - IBM's supply chain technology for traceability of the supply chain. Walmart has digitized their food supply chain process using blockchain. Employees can now get the full details of a food item in one barcode rather than spending days to get these details.

Nestle:

Nestle, one of the oldest Swiss multinational food and drink companies, seeks to retain its quality and standard by using this technology for sustainability and traceability. Nestle is part of IBM Food Trust, using a special tech tool (SaaS) that gives users info about where their food comes from. They're a big deal in the food world and, in 2019, they were the first major food company trying out a new system using blockchain. This makes their supply chain more clear. Teaming up with OpenSC, Nestle lets you follow your food ingredients back to where they started, like milk from New Zealand or palm oil from the Americas.

De Beers

De Beers, one of the largest diamond companies, has digitalized the trade process by using blockchain technology like Tracr to trace the authenticity of the diamond and its source, so as to confirm that it's not in a conflict zone as diamond mining is one versatile and very dangerous business.

Challenges/Misconceptions of Using Blockchain to Identify Counterfeit Products

While this may be one of the best blockchain innovations so far, it also has its downsides.

Trust

Truly, blockchain is taking its place in many sectors of our economy, but most companies don't see a long enough future in it to invest their huge capital and resources into it. They would rather settle for other ideas than digitize their products on the blockchain platform.

Also, bringing blockchain into an industry involves a total change in the way of doing things in the industry, which could lead to a bridging of trust and opposition among stakeholders.

cost expensive

Put together the expenses involved in running this operation and the time requirements for the barcode imprint and system configuration; most companies, especially starters, think it's expensive to work with.

Technical Issues

These include technical complexity and interoperability due to different blockchain platforms and standards, data quality and integrity issues, legal and regulatory uncertainty, as well as organizational and cultural resistance.

To address these challenges it's essential to focus on the following solutions

Pilot projects: companies should be encouraged to start with smaller-scale blockchain projects to demonstrate effectiveness before committing to larger implementations.

Collaboration: Companies can collaborate on shared blockchain infrastructure to reduce individual implementation costs.

Training programs: resources should be made available to companies to improve their technical capabilities in managing blockchain systems.

By addressing these aspects, companies can overcome barriers and fully harness the potential of blockchain in the fight against counterfeit products. It's a collective effort that involves collaboration between businesses, government bodies, and industry stakeholders.