crypto anchors

Crypto-Anchors And Blockchains Fighting Digital Battle Against Counterfeiters

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The supply chain is one of the most important areas that brands need to invest in to eliminate counterfeiting and to protect their brand image. By ensuring the transparency and legitimacy of the supply chain from the beginning to end, manufacturers and retailers can eliminate some, if not all counterfeit-related risks. Air-gapped control of the chain of custody and the flow of goods & materials used in the assembly of the final product allow brands to provide higher quality assurance and ultimately, permissibility to their consumers. Without this, there is a real risk of switching products with counterfeits throughout the supply chain process. But, this can be minimized to the extent of zero by using blockchain. Blockchain-based platforms facilitate combating counterfeit by tagging, tracking and verifying the authenticity of the product, which includes: Blockchain ledger distributed over private and public networks, members’ workplaces, and consumer application. After taking this much care, the counterfeiters still sneak-in the counterfeits and replace authentic products with them. Since normal tags are easy to replicate, use of Crypto-anchors is gaining momentum. GIA (Gemological Institute of America) is the first client to implement crypto anchors to help them evaluate and grade diamonds.

Blockchain: Shifting power from the centres to the edges of networks

The term Blockchain emerged at the end of November 2008, in a dissertation on a peer-to-peer electronic cash system posted in a US mailing list of cryptographers, by one or a group of computer programmers under the pseudonym of Satoshi Nakamoto. Since then, the term hems in two meanings: technically, the blockchain is a distributed replicated database that allows secure transactions between two entities without a central authority, but, in a wider perspective, experts and researchers use this term to identify the whole technology ecosystem behind digital assets exchange among participants of the same network, with no intermediaries.

To figure out the applications and implementation details of Blockchain, it is crucial to understand its fundamental principles, architecture, types, and components. At its essence, Blockchain is a shared digital ledger encompassing a list of connected blocks which are stored on a decentralized distributed network that is secured through cryptography. Each block consists of encrypted information and hashed pointers to a previous block, which makes it difficult to retroactively alter without modifying the entire chain and the replicas within the peer network. New blocks are substantiated by peers on the network, providing credibility and preventing malicious activity and policy violations. Cryptography and membership functions equip easy data sharing between parties without privacy breach and manipulation of records, thus shifting the power of centralised networks to the edges. All confirmed transactions are time-stamped to provide full record provenance.

Crypto-anchors: An Astoundingly tiny computer which use Blockchain tech to verify the authenticity

The cryptographic anchors’ project is contemplated as a starting point for developing technologies complementary to the Internet of Things (IoT) and blockchain solutions for medical devices and pharmaceutical products, able to provide scalable end-to-end security across a supply chain — from the manufacturers, right down to consumers and patients.

The “Industry Platform and Blockchain” team at IBM Research Zurich, which contributes to the Hyperledger Blockchain Project and develops privacy and cloud security technologies, is headed by Lead developer Andreas Kind.

IBM claims the new cryptographic anchors are the world’s smallest computers up to now. The devices are smaller than a grain of salt which contains several hundred thousand transistors and will cost less than 10 cents to manufacture; and can monitor, analyze, communicate and even act on data. IBM stated that the first models could be made available to clients till September of 2019.

“They’ll be used in tandem with blockchain’s distributed ledger technology to ensure an object’s authenticity from its point of origin to when it reaches the hands of the customer,” said Arvind Krishna, head of IBM Research. “These technologies pave the way for new solutions that tackle food safety, the authenticity of manufactured components, genetically modified products, identification of counterfeit objects and provenance of luxury goods.”

“Crypto-anchors extend blockchain’s value into the physical realm,” claims IBM. The devices possess an embedded security code that can be used to authenticate a product with a cryptographically secure, tamper-proof signature.

A typical application anticipated by IBM is fighting product fraud. IBM’s crypto-anchors can corroborate a product’s origin and contents, making sure, it matches the record stored in the blockchain. They can also help verify that a product has been handled properly throughout its long journey.

According to data provided by the company, counterfeit products in complex global supply chains, which extend across multiple countries with a large number of middlemen, cost the global economy more than $600 billion a year.

The risks of counterfeit products extend beyond finance. For example, in some countries, about 70 percent of certain life-saving drugs are counterfeit. But crypto-anchors can be embedded, for example, into an edible shade of magnetic ink, which can be used to dye a pill. “The code could become active and visible from a drop of water letting a consumer know it is authentic and safe to consume,” asserts IBM.

GIA: A Vital partner in Innovation

Gemological Institute of America (GIA) is playing a crucial role in placing the tested technology into the real world setting. It is also testing the Verifier software with a view to applying this innovation to diamond grading by capturing and creating 3D model images of diamonds, analysing their characteristics and predicting their clarity grade.

The opportunities for this Crypto Anchor Verifier technology are numerous, and the future is set to accommodate it. According to IBM website, this technology will be used to ‘’protect and validate all kinds of physical substances and, combined with the blockchain, bring new levels of trust to business transactions.’’

The new technology depends on the idea that the things we use and eat daily have their own unique optical patterns, sometimes undetectable by the human eye, which sets them apart from each other. These optical patterns can distinguish organic items from genetically engineered ones or even identify impurities in diamond.

The measurement of optical characteristics is done using light spectrometers that measure properties of light. Besides, these instruments’ drawbacks include their enormity and cost. This means that a more adaptable tool is needed for optical analysis in real-world junctures.

The models are trained with data that include the recognition of the optical characteristics of a substance, liquid or object including its color, motion, viscosity, and hue saturation.

For this to be powerful, it is paired with the software that uses the smartphone’s computing capabilities. This software uses the combination of AI trained on optical signatures and image-processing techniques. This combination is what is called IBM Crypto Anchor Verifier.

This technology partners aptly with blockchain technology in the sense that IBM’s Crypto-Anchor Verifier is used to capture the “optical signature from an original, uncompromised item and subsequently record it on the blockchain, which can verify throughout the supply chain that the item hasn’t been tampered with.’’

Future of Crypto-anchors

Crypto-anchor is just coming out of its cocoon. There are countless possibilities for its implementation in about every aspect of every business. As IBM illustrated in a science-fictional demonstrator developed by IBM scientists, a crypto-anchor is combined with an optical sensor and Artificial Intelligence (AI) algorithms are able to rapidly identify materials and detect the presence of DNA sequences.

IBM claims that “[Within] the next five years, advances in microfluidics, packaging platforms, cryptography, non-volatile memory, and design will take all of these systems from the lab to the marketplace.”



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