How Creating Digital Twins on Blockchain Will Protect Brands?
One of the biggest concerns companies and brands always have is regarding the counterfeiting of their products. Due to easy access to technology everywhere, it is easy to create replicas and pass them off as the real deal, thus taking business away from a legitimate brand and ruining its reputation in the process, creating digital twins might be the answer to such concerns.
Digital twins in the modern age
The concept of digital twins is not a new one. A digital twin is a digital representation of a physical object, process, or system, and it can exist in many forms. When you are using your smartphone, surfing the internet, storing your data online or using social networking tools, you are essentially creating a digital footprint of yourself. You can think of this footprint as a digital representation of yourself, ergo your digital twin.
Similarly, you can think of digital blueprints for a building as its digital twin, or a computer simulation of an aircraft engine as its digital twin. The term, therefore, can be loosely applied to any form of digital representation.
However, the advent of the Blockchain technology has redefined the concept of digital twins. Blockchain enables the storage of information in a decentralized manner with no single point of control. Information can be added, but not modified or corrupted, thus ensuring transparency and data integrity.
Creating digital twins on the Blockchain
Blockchain is a decentralized digital ledger that can immutably store transactions that cannot be changed or corrupted, nor controlled by any central authority. The significance of Blockchain extends far beyond the realms of cryptocurrency.
Creating a digital twin on blockchain would mean that all information regarding a product can be saved immutably. Furthermore, its transaction records can be saved as well, allowing buyers to see where the item was made, who were its previous owners, were (and subsequently who its current and legitimate owner is) and so on. This will help create proofs of authenticity and identity.
Consider a Rolex watch, for example. There exist countless replicas of this watch. And if a fake watch can be made, fake documents can also be made to go along with it, ‘proving’ its authenticity. Creating digital twins on blockchain provides an excellent solution to this problem; digital certificates for the digital age.
Asset identity and authenticity
Digital certificates stored and issued with the help of Blockchain will ensure that these certificates will not be copied, modified, faked, corrupted or even stolen. Each physical product can have a digital certificate which is brandable, transferrable and updatable (with new information).
LuxTag is a Blockchain startup working along these lines to set up custom notarization standards for asset authentication and ownership identification. Based on the NEM Blockchain, LuxTag provides digital certificates for establishing brand identity and asset ownership.
Brands can register their luxury items on such platforms to establish brand identity and protect themselves against counterfeiting. When that item is shipped out to a store, the digital certificate will be updated, and information about the store will be saved. When a customer walks in to buy that item, they can check the digital certificate before purchasing in order to make sure that the item is not counterfeit. Once purchased, the store can transfer ownership of the item to the customer. All of this information will be stored to provide proof of authenticity and ownership when needed.
Besides ensuring product reliability, this technology can also act as an anti-theft mechanism for your luxury items. Should it be implemented globally, the sale of stolen goods will go down dramatically thanks to unverified ownership. It will also raise security, product authenticity and customer satisfaction, thus protecting brands against counterfeit fraud and negative publicity.