Blockchain Is No Silver Bullet Against the Black Market

More technology is needed to link the product purchased with the record on the ledger

By Jemima Kelly

LVMH is set to launch a blockchain-based system to authenticate goods and satisfy the trend for conscious consumerism by giving customers the “life story” of their products.

The French multinational said it would soon launch its Aura initiative, which it calls “the first global luxury blockchain”, although no specific dates were shared. LVMH will start using Aura with the Louis Vuitton and Parfums Christian Dior brands, it said, before rolling it out to its other houses and offering it to rivals.

Many industries are looking at the possibility of using blockchain, the distributed ledger system that underpins bitcoin and other cryptocurrencies. The idea is that because blockchains are immutable and decentralised, the data stored on them is trustworthy and secure. In theory, the technology should help conscientious customers understand the provenance of their purchase and know it is genuine.

But blockchain cannot detect whether a set of data is false: rather, it makes sure that once data has been recorded, it cannot be tampered with. Moreover, additional technology is needed to link the product purchased to the record of it on the blockchain. So while it might be an opportunity for jewellers to promote responsible supply chains, blockchain is no silver bullet.

“Louis Vuitton offers a new service to its clients by unveiling the story behind their products,” said LVMH when it announced the project at the Paris VivaTech conference in May. “Every step of the item’s lifecycle is registered, enabling a new and transparent storytelling.” The company declined to comment for this article.

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