Image for post
Image for post

Solving the Problem of Counterfeit Goods with a Decentralised Ledger

From clothes, software, intellectual property, to digital media, we are surrounded by counterfeit goods.

Vinay Nair
Aug 15, 2019 · 3 min read

In the United States alone, the cost of counterfeit goods is put at a whopping USD 600 billion per year.

As per a report by the International Chamber of Commerce, counterfeiting is projected to drain as much USD 4.2 trillion from the global economy by the year 2022. Not just that, as much as 5.4 million jobs are put at risk because of the fake goods industry.

The disappointing aspect is that the lack of regulatory framework, international laws, and non-cooperation, all hinder the successful eradication of counterfeit goods from the world’s economy. That’s not all, the ineffectuality also results from a variety factors such as the innumerable array of consumer products, opaque supply chains, increased costs associated with enforcement, lack of resources, and large volume of international trade.

With a distributed ledger, the revolutionary Blockchain has the potential to streamline processes and subsequently put an end to the industry of counterfeit goods.

Let’s see how Blockchain can assist in the fight against counterfeit goods:

Image for post
Image for post

Supply Chain

With its decentralised ledger, Blockchain tech can transform the supply chain by facilitating the storage of the entire transaction history on a shared database. Hence, the movement of goods can be traced with accuracy with Blockchain. Such a network would be able to provide the origin of the products.

Thus, users and manufacturers will be able to authenticate the originality of a any product. Leveraging this methodology is the New Zealand-based startup, Origins.The startup is using Blockchain technology to trace the production and sale of garments. It thus provides the end consumer with the facility to verify the source of the clothing item in the retail industry.

Image for post
Image for post


Blockchain-based supply chain solutions are also applicable in the pharmaceuticals industry.

By assigning each medicinal bottle or packet with a unique identifier, the end user as well as the manufacturer can trace the movement of the medicine across the manufacturing and transportation process to verify its legitimacy. As per a report, in 2014 counterfeit medicines imitating the ones manufactured by American pharmaceutical corporation, Pfizer, were being sold in as much as 107 countries. This black market is responsible for the growing number of fatalities.

Image for post
Image for post

Intangible Assets

The biggest impact that Blockchain technology will have is in the category of digital assets, intellectual property, and other intangible goods. Thus far, it has been very hard to prevent the misuse of Intellectual Property.

Reproduction of digital files without permission is also very prevalent.

With its Smart Contract system, Blockchain facilitates the enforcement of Intellectual Property agreements. In case of breach of IP rights or the illegal reproduction of an asset, Blockchain will enable us to trace the origins of the tampering.

Blockchain will have a revolutionary role to play in the intellectual property rights arena, because while internet helped ease communication and sharing of data , it will be only now that we will be able to enforce the intellectual property rights in the intangible assets domain.

Blockchain technology may be still in its nascent stages but the distributed ledger tech holds immense potential in curbing the counterfeit goods industry by making end customers aware of their purchase and the provenance of their goods.

Manufacturers will be able track the movement across the supply chain to ensure that there is no tampering with the goods.

The Startup

Medium's largest active publication, followed by +719K people. Follow to join our community.

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store