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https://cryptotvplus.com/2023/06/counterfeit-problems-and-the-need-for-blockchain-solutions/

How Blockchain Could Solve Counterfeit Problems

Ali Beydoun, Founder & CEO of Manufact, at the conference, estimated that “counterfeiting has grown over ten thousand percent since 1980, affecting 10 percent of luxury goods brands.”

Counterfeit problems have had a significant impact on the luxury goods market, with the growth of counterfeit goods outpacing the growth of the industry itself. Ali cited the cigar industry as an example stating that “Habanos, a prestigious cigar brand from Cuba, reported a loss of $50 million in the European market due to counterfeiting.” The need to address this issue as the CEO highlighted his experience with a counterfeit cigar box prompted the birth of Manufact, he said, a company dedicated to combatting counterfeiting.

Manufact collaborates with manufacturers to track the entire lifecycle of a product, from production to consumption. By capturing data on a software platform supported by blockchain, each physical item receives a digital token. This process makes it easier for regular consumers to access and benefit from blockchain technology. Manufact has implemented this approach in the cigar industry and is expanding its efforts to combat counterfeits in other sectors, such as liquor, coffee, and honey.

Using a cigar box as an example, Manufact showcased how blockchain technology verifies product authenticity and prevents tampering. By tapping a smartphone on a sealed cigar box, consumers gain access to detailed information about the product, including its limited-edition status, production date, factory details, and description. 

Moreover, the integration of location tracking helps manufacturers identify potential theft or unauthorized distribution. If a box is scanned in a location different from its intended destination, a warning is triggered, allowing for immediate action. The blockchain-based seal ensures that once a box is opened, it can no longer be resealed, making counterfeiting extremely challenging, Ali said.

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Posted

Utter nonsense, this is just some crypto bros desperately trying to find an application for their useless 'technology'. Blockchain does not solve the counterfeiting problem, indeed it doesn't solve any problem, just ask the Australian Stock Exchange how their implementation went.

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Posted
21 hours ago, amberleaf said:

Utter nonsense, this is just some crypto bros desperately trying to find an application for their useless 'technology'. Blockchain does not solve the counterfeiting problem, indeed it doesn't solve any problem, just ask the Australian Stock Exchange how their implementation went.

Alright, I'll take the bait on this one as I've been down that rabbit hole since 2017.  While "crypto" often fairly receives criticism for being a tool to speculate on the underlying distributed ledger technology is game changing.  Information on the blockchain is verifiable and transparent while being near impossible to cheat.  This decreases friction and improves efficiencies in markets.  I've followed VeChain and they offer a similar supply chain management authenticity product which has seen some real world traction but these things take time.  I'm also an investor in Club Dvin which is introducing the opaque and very inefficient world of wine to Web3.0.  It's still early but the POC has been proven out across dozens of use cases which I'm happy to delve into if you have any interest.  I don't know the specifics of the Aussie Stock exchange implementation but I can tell you that in the US the DTCC are leaning into this.  In financial services right now there is so much rehypothecation happening that there is often misuse of pledged collateral in the system.   

Living in the US and growing up in Miami AND having the fun experience of buying a counterfeit box of cigars when I was 16 years old solutions like this appeal to me.  I realize throughout much of the rest of the world this may not be viewed as necessary.  It certainly is in South Florida and I expect many other areas throughout the US as well as heavily touristed locations around the world.  

Most people will dismiss blockchain because of its previous boom and bust cycles but both crypto (mainly BTC and ETH) are both here to stay and serve and extremely valuable role in our future with Web 3.0.  

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Posted

As with most tech stuff I’m a big fan of the block chain concept and, although I don’t acknowledge it as an investment vehicle, a proponent of digital currencies.  I’m having a hard time seeing the value here beyond the rarest and most expensive limited run items.

For regular production boxes, once a token is out in the wild, there’s no issue copying the hash and applying it to a counterfeit box.  Not to mention that it’s even simpler to have a real box with fake cigars in it.  This is why I have a tough time with tokenizing physical items, especially the kind you literally can’t mark (such as the tobacco in the cigar or the wine in the bottle) - at best, you’re authenticating the packaging.

The extra step (that still isn’t foolproof) is to have people register the token with additional, specific data.  Beyond those ultra rare, expensive items, I sincerely doubt most folks would be willing to publish identifiable data to a public block chain.  If they were, the current bar code system could serve a similar purpose.  I’m also not advocating for this as I wouldn’t associate data to myself in this way.

Going a step further, let’s say we have a suspect box of cigars and decide to validate the token.  The token validates and shows us the record of this box; date of manuf, date a sale, cost, factory, and the chain of custody as it leaves the factory and makes its way to the shop.  None of this is concrete proof that the cigars in my box are the real article, just a preponderance of supporting evidence.  People can barely figure out the bar code and stamp system so I doubt they’ll be able take the records from a public ledger and make the logical leaps necessary to unwind the data.  
 

Additionally, we know for sure that grey market vendors wouldn’t participate in this program as they already scratch serials.  Let’s also think about Habanos’ implementation of a relatively simple barcode lookup scheme…I think blockchain is probably out of reach.

Last thought as I could ramble for a while on this topic.  Maybe I’m over simplifying here but I see advanced print technologies as a much higher barrier to entry when compared to digital counterfeiting or hacking.  Once you’re in computer-land, any jerk with a keyboard can take a crack at this.  Way easier to get a computer and internet connection than it is to buy a modern secure printing rig.  Not to mention there are likely far more people on the planet that understand how to take advantage of a blockchain tech compared to people who understand the ins and outs of printing currency, etc.  Personally, I’d like to see Habanos step up the game on printing and regularly iterate it to keep the attack surface shifting.  I’d also like them to revise the barcode site to something very user friendly.

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1 hour ago, aavkk said:

Information on the blockchain is verifiable and transparent while being near impossible to cheat. 

🤣 

So, we're just pretending FTX didn't happen, or has every forgotten already?

Any of this stuff can be scammed and has already been scammed, because suckers are going to be suckers. They always have been.

Quantum computing is already making our once "infallible" 64 and 128 bit encryption obsolete and as it moves into the mainstream, it will be cracking more and more complex equations. As @amberleaf said, this is just another desperate grasp at relevance from the people trying to profit from this stuff. 

Posted
6 hours ago, Corylax18 said:

So, we're just pretending FTX didn't happen, or has every forgotten already?

I'm not a special pleader for blockchain tech but I don't believe any FTX account holders actually owned the crypto they "held". I believe you could only own shares of a given crypto. You might have been able to own FTX's crypto but that was obviously Monopoly money. 

I do believe there is a way to create unique tokens for anything, however the obvious issue with consumables is that you can't tag the actual item--only the packaging. I suppose tagging the bands also would provide an additional level of security as it's not been my experience that even high-end fakes use 100% genuine packaging with fake cigars. Almost always some aspect of the packaging is fake. Very rarely if ever has an original buyer of the genuine cigars bought a $10k box, carefully removed every band, smoked the cigars, found great looking cigars of the same vitola (which are often uncommon in special production), repackaged them and tried to peddle the box in the secondary market. High-end fakes are almost always a whole-cloth operation. 

Also removing original bands in perfect condition can be a perilous task. If one's entire intention is to keep the original cigars careful band removal can often damage the cigars. Removing bands in a pristine way is easier said than done. 

I think that if 100% of the packaging, including bands, is authentic the chances of the cigars themselves being fake is actually lower than one might think.

Posted
10 hours ago, Corylax18 said:

🤣

So, we're just pretending FTX didn't happen, or has every forgotten already?

Any of this stuff can be scammed and has already been scammed, because suckers are going to be suckers. They always have been.

Quantum computing is already making our once "infallible" 64 and 128 bit encryption obsolete and as it moves into the mainstream, it will be cracking more and more complex equations. As @amberleaf said, this is just another desperate grasp at relevance from the people trying to profit from this stuff. 

Writing off the $1T asset class that is digital assets/Web3.0 now would be exactly like writing off the internet in 2000 because of Pets.com.  People forget that Jeff Bezos was brought on 60 minutes just so they could laugh at him about how his company was valued too high for an online book store.  In every emerging asset class/ecosystem of development there will always be bad actors.  In fact, a lot of people aren't even aware of how close the US legislators were to pushing back the internet revolution by years with a failed proposal to ban encryption.  They wanted a backdoor view into all e-commerce.  They were concerned with fraud and all the potential misuses of e-commerce that they wanted to ban it in the mid 90's, lol.  This is exactly what we are seeing today in the emerging Web3.0.  Every new technology has benefits and drawbacks.  This is an evolution of the internet thats inevitable and very badly needed.  The future is hard to predict but most people's default position is to be fearful of change and you cant have innovation without change.   Why can we send an email anywhere in the world for very close to free but sending $$$ costs as much as 10% and takes 3-5 days to settle?  The former is because of open and permission less protocols (smtp, http, tcp/ip) and the latter is because of a broken 1970's era mafia org known as SWIFT.  Change is coming, might as well position one self to be a winner through the change.  But change takes time and most people's time horizon is too short.  Most people also only look at price which is almost always a huge distraction- both to the high and low side.  The metrics that we should be following are Daily/monthly active users, # of active builders/developers, daily trading volume and certainly funding.  The useful things being built today bear fruit tomorrow.  The best free way to monitor these types of metrics is the A16z newsletters.

https://a16zcrypto.com/posts/article/state-of-crypto-report-2023/

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Posted

I remember the days one would not trust someone with a mobile phone number. Nowadays a mobile number is required for all sorts of authentication.

 

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Posted

How can you actually “lose” $50 million on fakes when you have no real cigars to replace them?

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