FAB Use Cases: Luxury Goods

In this series, we tackle different potential use cases of Fast Access Blockchain and how we can build a better world through our solutions.

New Applications, New Business Models, New Possibilities

Applications which are an ideal fit for blockchain technology have the following characteristics:

  • Involve multiple organizations
  • Where trust is key, or trust is presently severely eroded
  • Proof is key
  • Involve exchange/transfer of assets or value
  • Involve data sharing or presently suffers from silo’d data
  • Benefit from micro transactions/streaming
  • Have opportunities for new business models, products or services

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Proof of authenticity and ownership are the two key issues in luxury items such as watches, handbags, cosmetics, fashion, wines and art. In the world of luxury items and art, the costs of not having easily verifiable methods is very high.

The Global Brand Counterfeiting Report 2018 estimates luxury brands incurred a loss of 30.3 billion dollars through internet sales.

Establishing ownership is a major issue for a number of reasons. Without a simple way to verify ownership of an item on the item directly, it incentivizes thieves to steal high-value items. Additionally, some owners may lose track of all the high-value items they may have ownership over without a simple way to maintain inventory of all items.

The application of blockchain technology to this area is easy to understand. Blockchains can be used to record transfer of ownership of an item from origin or manufacturer through to consumer (i.e. provenance).

The ownership record would consist of the manufacturer, product description, serial number or other unique identification data, and cryptographic hash signature of the record that can be independently verified by anyone that the item came from the manufacturer, and the party selling the item is the present true owner.

This effectively eliminates the problems of counterfeit and stolen goods, as well as fraudulent documents.

In the case of items such as diamonds, the blockchain record would also contain detailed characteristics, measurements and high-res photos of the diamond to uniquely identify it. For things such as art, a standard object ID can be used the provides a standardized physical identification system for all objects. This ties the physical objects to the blockchain record, and can also help return stolen objects back to their rightful owner if the characteristic & measurement data was publicly searchable.

For diamonds in particular, the provenance data also aids to ensure that diamonds are conflict-free (do not come from areas that use the sale of diamonds to finance wars or terrorism). In the industry this is known as the Kimberley Process certification.

Furthermore, blockchains can create a simple way to evaluate and appraise valuable items in a transparent way. Records of data allow for easier comparisons on the market as well as a way to track the ownership of specific coveted items.

On top of the above benefits, a standard marketplace for luxury goods would greatly reduce the red tape associated with sales of certain goods and create a standardized legal process.

FAB is currently in the process of helping to address the myriad of issues surrounding the luxury goods market. FAB has partnered with Rx Arte to tackle these specific issues surrounding luxury goods.

Rx Arte is a blockchain platform that sells, licenses, protects, stores and manages intellectual property rights such as art, limited editions, collectibles and other luxury goods and will also be a marketplace for artists.

The project is headed by intellectual property lawyer and art agent Vandana Taxali at Encountsel. For more information on the project, visit https://www.rxarte.com/.

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