BlockTac Podcast #4 – Digital Seals: 2. Where can they be applied?
This is Francisco Guillén, BlockTac CEO, and I welcome you to a new podcast of this series in which we will introduce you to the different developments we carry out at BlockTac.
We continue today describing in detail one of the most outstanding BlockTac developments based on the application of Blockchain technology. I must point out something that I did not mention in the previous podcast, and it is the international recognition that we have been awarded for this innovation. Our digital seals applied to fight fraud in food and consumer products have received the Seal of Excellence for Innovation provided by the European Commission. This is a recognition obtained in highly competitive conditions.
Today I am going to review with you those industries in which we are presenting and applying our digital seals. I must explain that this is not a theoretical description of potential uses of Blockchain technology but rather concrete applications to solve business problems of our clients.
I should say that its implementation reaches many different industries due to the extent and severity of counterfeiting, as I mentioned in the previous podcast. And this corresponds to the need for companies to provide consumers with a proof of authenticity that is safe and easy to verify.
To make it more enjoyable, I will organize the description of the different industries in the form of a historical journey through the development of our commercial activities, which in part arose from our own initiative, but on other occasions were the results of our clients’ demands. On many occasions, we were surprised by the particularities of fraud or counterfeiting in industries in which we could not imagine its impact or its extension.
I will start with the food and beverage industry. Here, the perception of the need for an authenticity identifier originated from the personal experience of Enrique Lizaso, my partner, and co-founder of BlockTac. A group of Spaniards gathered for dinner in a great country in the far east, and with a spirit of celebration, decided to order a bottle of wine from a famous brand from La Rioja. The product was very convincing until they verified the absence of cork and the poor quality of its content.
The problem of counterfeiting in wine and olive oil, star products with Spain appellations, proved to be serious enough to influence the first developments of our seals in these products and the arrival of the first international awards and recognitions. Usually, the implementation consists of a double-layer label that hides a unique QR code for each unit, which when scanned allows to immediately verify whether the bottle is original, whether it was previously opened and on what date, or if it is a copy and can be denounced on the spot to the original producer.
We apply these types of seals to fresh or processed food products, whether it is meat or fish, or seasonal fruits and vegetables. It is important to clarify that these are not generic or batch identifiers, that cannot avoid counterfeits, or that will only provide general information about the product or the company. We have seen some applications that claim to use Blockchain technology, but that are developments on private chains, and that do not solve the counterfeiting problems described above.
Another industry, close to the previous one, in which we are working is that of spirits. Here we discover that counterfeiting is abundant, with a high economic impact, and complemented by irregular behaviors in the distribution channel. We have found that the issues are different depending on the countries and the points of sale, but all can be solved well with the digital seals, supplemented with specific certificates for the control of the distribution channel.
Another important industry, due to the impact of fraud, is that of medicine drugs. In Europe, it is also characterized by being highly regulated and the use of a serialized identification system, based on an earlier technology, which has significant implementation problems and is not designed for the final consumer.
In our case, we have chosen to work with state medicine agencies and manufacturers in Latin America, where the problem of fakes affects one in three of those being sold and with the additional harm to the health of the population. And its application is not limited to prescription drugs but also extends to OTC products.
In this industry, the implementation of the unique identifiers registered with Blockchain technology adapts to the characteristics of the product, either in the form of external double-layer labels such as in the food industry or inside the box that contains the product.
And the functionality of the seals is not limited to avoiding counterfeits but helps to provide information on the way in which the medication must be administered, which in some cases is especially critical and that will be discussed in a coming podcast.
Now I will comment jointly on two similar industries, cosmetics and perfumes, both characterized by their high priced products. The cosmetics are somewhat more affected by counterfeits, but both are greatly disturbed by the illegal trade in gray markets.
Also here the use of identifiers adapts to the product attributes and the digital seals are complemented by specific certificates in the secondary packaging for better control of the supply chain.
Lastly, I will describe the applications of our certificates and digital seals in the fashion and luxury accessories industries. Here, the requirements for authenticity proofs and supply chain control are increased by two new demands. On one hand, protection of the intellectual property of the designs claimed by their authors, and on the other, the consumers demand for a certificate of the ecologic quality of raw materials or the company’s social responsibility in the manufacturing processes.
The implementation of our certificates and seals customizes the large variety of products and diversity of functions demanded, and also include the identifier data on other media such as RFID devices.
To be fair, I must admit that I leaving out some economic industries you might have heard of the application of Blockchain technology and perhaps even know of some proofs of concept developed there. The reasons for not commenting on them now are, in fact, three:
- The first one is discretion, since we are developing at this moment original and novel applications of our authenticity seals and we want to wait a few weeks to release the news. But rest assured that we will communicate them through our website and social networks, and I intend to dedicate specific podcasts to talk about them.
- A second reason is opportunity. I did not mention today some of our digital seals’ implementations because they do not fit properly into economic industries that are usually called “vertical”. This is the case of logistics or supply chain applications, whose operations are common to many markets. Some of you know our standing in this matter and that it is a subject that we are passionate about. I plan to cover it in at least one of the future podcasts. But in the meantime, you can find a wealth of information in various posts on the BlockTac blog.
- And the third reason is for honesty. I do not want to waste your time with theoretical applications of Blockchain technology, which do not answer to real demands from companies or with which we have no experience. In fact, we have been consulted by significant industry players, we have listened to their interest in the Blockchain and we have discouraged its implementation for not responding to a significant need nor representing a clear advantage over the management systems already in place.
Nothing else for today. I have presented you with wide applications of our digital seals in different industries and products. All of them share the need to prove that the product is authentic and its origin, something that our developments solve in a simple and innovative way, at a very competitive cost, significantly cheaper than any other technological solution currently available.
In a future podcast, I will delve into the functionalities of the seals, which go far beyond the authenticity prove for consumers.
Thank you for your attention and see you soon.