Loro Piana harnesses the power of blockchain technology to digitally certify the authenticity and traceability of its products. Working with the Aura Blockchain Consortium – the first global blockchain dedicated to the luxury industry – the brand will use Aura’s technology to unlock visibility and traceability for its hero fabric The Gift of Kings® wool.
A “blockchain” is a digital ledger containing a series of encrypted transactions between data file addresses commonly called “wallets”. These addresses have a public key that allows them to be opened and used for transactions and a private key, which is used to control access to the information in that wallet. It is this combination of public and private encryption keys that makes a blockchain system so secure. That means if someone tries to access the data in a wallet, they have to decrypt and modify every block in every wallet in the chain – without knowing both the public and private encryption keys, this process would take almost the age of the universe to complete. Blockchain technology can provide a secure audit trail that can easily be used to track the movement of raw materials used by the fashion industry as they move through the supply chain.
There is no central authority that can manipulate the data stored on a blockchain – the information has been recorded and verified by multiple computers around the world. These computers (often servers) are called nodes, and they are responsible for checking and approving the transactions that go on the system. Once a transaction is approved, it is added by encryption to a list of blocks in multiple wallets in the blockchain. Each block contains a time stamp, digital signature and other relevant identifying and authentication information. This information is then transmitted across all the nodes on the system, and when a particular person receives the private key for that block, they can complete a transaction. One of the most exciting aspects of this technology is that it is virtually impossible for hackers to destroy the encrypted data held within the blocks of the chain.
Counterfeit goods have become a major problem for high-end designers worldwide. According to some of the biggest luxury brands, counterfeits account for nearly $98 billion in lost sales each year. In response, several of the industry’s biggest names are using blockchain to track their production and ensure the sustainability of their products. Chloe Vertical uses a blockchain called EON to track cotton from field to fashion show. Similarly, Stella McCartney’s Spring 2023 collection features a Snog-a-Log graphic tee made from climate-positive verified cotton grown in Turkey by farmers who use regenerative practices that capture and store more carbon in the soil than they release. One of the most innovative uses of blockchain is Ccertificate of authenticity, which gives consumers confidence in their purchase by tracing the origin and authenticity throughout the product’s life cycle. However, this is only the tip of the iceberg. LVMH, Prada and Cartier look set to develop a global blockchain that could become open to all luxury brands, bringing a whole new layer of security to their customers’ data.
The Aura Blockchain Consortium, launched in April 2021 by LVMH, Prada Group and Cartier, part of Richemont, is designed to raise the bar for luxury by enabling a single global solution covering all aspects of the supply chain – upstream as well as downstream traceability for each brand. This is the first non-profit association of luxury brands investing in technologies and innovative thinking to promote a circular business model, build trust and transparency for their customers, accelerate innovation and promote sustainability.
Unlike other solutions, Aura Blockchain is not only secure, but also private and local, meaning members have full control over their data and can manage it with the highest possible privacy standards. This also means that it does not require a huge amount of electricity to process large amounts of data, making it more energy efficient than other blockchain-based solutions and therefore less likely to cause emissions. In addition to this solution, the Aura Blockchain Consortium is also working on a suite of turnkey tools that can accelerate the path to market for smaller brands that may not have their own advanced front-end systems. These could include simple, ready-to-use tools that would allow consumers to visualize data on the blockchain, such as how their clothes were made and where they were sourced. Next week we will look at some of the thought leaders for the use of blockchains for the fashion industry.
