Beyond Crypto: Using Blockchain To Improve Security, Privacy, Customer Relationships By Peter Nicholson
Blockchain isn’t just for financial companies anymore.
Luxury brands are getting into the technology on a number of fronts, from accepting crypto currency payments to issuing NFTs. But they’re also beginning to use blockchain for more sophisticated operations like enhanced data security and supply-chain authentication.
The recent crypto crash spurred by the FTX bankruptcy put a chill on the sector’s rapid growth. But that’s not stopping companies from finding the upside of the technology.
Here’s how brands are forging ahead with blockchain to solve a host of digital headaches.
Industries are losing trillions to counterfeits each year. But blockchain’s public ledger technology can help reverse that trend. One of the benefits of blockchain is the ability to authenticate supply chain information via a digital identifier at every step of the process.
This can be helpful for designers of pricey handbags and jewelry like LVMH, Prada and Cartier, who are among the founding members of Aura Blockchain Consortium. The two-year-old association registers products made by the members and provides digital certificates that assure customers that the goods they purchase are authentic.
Managing data security
As brands battle bad press over data breaches and privacy concerns, more are using blockchain’s security features to create new models for managing data.
As mass adoption happens, the benefits will become clear to consumers as well. Instead of worrying about privacy, people will retain ownership of their data and can revoke it at any time even after sharing with a brand. Or, consumers could determine a value for their personal data and demand a price for access.
The technology can also help brands root out digital advertising fraud that can cost them billions in fake clicks and engagement annually.
Ensuring contractual terms
NFTs became the rage in the art world, but they took a beating along with the crypto crash last year.
But NFTs are more than art. The art industry used blockchain to protect not only the authentic piece of digital work, but artists’ rights to their creations. NFTs help ensure royalty payments and contractual agreements are unbreakable.
Brands like Gucci, Louis Vuitton and Nike are launching NFT collections and experimenting with metaverse promotions to help market their real-world products.
Winners and losers
Of course there are always winners and losers in every iteration of new technology. The winners in the blockchain universe look like luxury brands, financial firms, car brands, rental companies, hotels, entertainment leaders and subscription services. Each will benefit from assuming more direct control of customer data
The losers will be third-party social media and search platforms like Google and Meta -- the intermediaries that currently control digital advertising and the customer interface. Blockchain’s core business killer is decentralization. Brands won’t need to play by the rules of Meta and Google in the future.
Here’s the bottom line: Brands are finding a lot to like about blockchain as the technology matures and becomes more mainstream. Its uses go beyond payment systems, to back-end business applications like anti-counterfeiting and data security.
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