Provenance to restore consumer trust with the blockchain

The international trade in counterfeit goods is growing at an alarming rate. The International Chamber of Commerce estimates that the total value of counterfeit and pirated products could be as much as US$1.77 trillion in 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

With more counterfeit goods on the market, consumers have an even greater need to find trust suppliers, and quality information since there are many dangers in using counterfeit products.

The United Nations Office on Drugs and Crime (UNODC) warns consumers against buying counterfeit goods which can cost them more than just financial loss. Using counterfeit goods can cause illness, disability or even death. For example, some fraudulent medicines have been found to contain highly toxic substances such as rat poison, according to the UNODC.

Food is another area where trust is paramount. Tainted milk formula containing melamine, a chemical normally used in plastics, made 300,000 Chinese babies ill in 2008, about 54,000 of which were hospitalized and six died. There have also been cases where rat poison and other dangerous chemicals have been found in food, where other more expensive and legitimate additives should have been.

No matter if we're just worried that some food item is fresh enough, or want to buy a genuine Gucci, or are trying to figure out if that wild Alaskan-caught salmon was really from Alaska, trust in a company and their brand is all we've really had before recent times to ensure that these products meet our standards.

Many major brands have put a lot of efforts into building trust by making the process of creating and shipping their product more transparent. Proving the value, freshness, and authenticity of everyday products using tracking software has been attempted before today, but the delivery of that data, or the trustworthiness of that delivery system, was simply not good enough. Consumers still have to rely on any of the data entered into the system, and it could have been edited after the fact too.

At least a dozen legacy software tracking systems exist out there that can follow an item from producer to the store, and tell us something about it online, but from a consumer's standpoint, why should we trust their data?

Producers create and control all of that information, not consumers, nor even government, so if there is some doubt about where the Gucci bag originated or how old the Salmon is, you'd be naïve not to ask why they couldn't simply misreport or outright falsify the numbers when it is to their advantage to do so.

Nowadays, however, we have Bitcoin. Whatever happens on the blockchain, stays on the blockchain, and everyone in the world can see it. What better place to record and share such important, ongoing information? Trust in a supply chain can finally be had, at least from the point where the information first gets added.

Provenance is the first enterprise to step up and create these transparent supply chains for all types of products. While a few specialized services like Everledger and Ascribe use the blockchain to track single product types, in their cases of diamonds and digital artwork respectively, Provenance was designed to track any type of product, throughout every part of its lifecycle.

All three use the immutability of the blockchain to record information about their products journey, but Provenance is the first to create a system where all of a product’s history can be traced from the producer to the consumer completely, giving updates along the way at each step - where it is, who has it, and for how long.

Provenance tracking

Such a detailed level of reporting, all readable from your smartphone while the product still sits on a store shelf, and written to the immutable blockchain no less, is a level of service far beyond anything companies have ever done to build trust with their consumers before.

Such radical transparency is sure to make raving fans out of everyday customers, and could easily become a competitive advantage. Founder and CEO Jessi Baker recently told Wired that “you might say we're experiencing a slight crisis in brand trust," she said. "We need mechanisms to help broker this digital trust.”

The detailed level of reporting is key, she clarified, detailing the example of a current test project that tracks fish from the hook to the customer.

- Jessi Baker, CEO Provenance

Her London-based company, which is well-funded but still in a closed beta testing stage, has just released their whitepaper, which reads a bit like a commercial but is still very interesting. Titled “Blockchain: the solution for transparency in product supply chains,” this short manifesto walks us through their solution for providing transparency to product supply chains, taking care to explain the involved concepts like the blockchain and private keys along the way.

- Provenance whitepaper

Although the whitepaper doesn’t specifically mention which blockchain they will be using to store all of this information on, a presentation they did for Coinscrum recently tells us that they are using both the Bitcoin blockchain for tracking, and the Ethereum blockchain for contracts with certifiers and other third-party organizations.

After taking care to explain why decentralization is needed to provide any sort of true transparency, the paper promotes the use of the blockchain and especially how auditable it is.

- Provenance whitepaper

It then defines the six different actors their system will be tracking:

  1. Producers

  2. Manufacturers

  3. Registrars (Organizations that provide credentials and unique identities)

  4. Standards organizations

  5. Certifiers and Auditors

  6. Customers, both the retail store and we the buyers

Standards organizations and Certifiers are a large and welcome part of the process, allowing for physical inspections of various kinds, at various levels. Provenance is already actively working with several of them, and is attempting to get similar services to self-register in the future.

provenance services

A few of the many certification services that can plug into Provenance.

Every user at every step will have to register with Provenance, either publicly or anonymously (even consumers) and each will receive a Private Key to prove their identity trustlessly, and give them the ability to write to the blockchain as themselves.

- Provenance whitepaper

As physical products move between one step of the supply chain to the next, they have to be accurately tracked, out here in the real world first and foremost, which has caused Provenance to invent new technology for more accurate tracking, too.

- Provenance whitepaper

provenance tagsTo this end, the team has been exploring several technologies and has come up with a label that uses a unique QR code and NFC tag that both link the product back to the source of its creation. It won’t be the only technology used to physically tag items, but is being used in testing now, according to the whitepaper.

The end of the paper mentions fraud prevention and sustainability (circular economy) benefits that Provenance can offer to the overall product lifecycle process as well. Tracing the individual components of goods, such as electronics, could make recycling it far more efficient, reducing waste and pollution worldwide.

- Provenance whitepaper

With such a mind-boggling amount of provenance data all tied together in one universally-accessible and immutable place per each and every individual product, it is easy to believe that we are truly arriving in the information age that cyberpunk novels and sci-fi films promised us all of those decades ago.