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NFTs Could Make Counterfeits a Thing of the Past

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Humor me for a second…

Imagine you’re driving a cherry Lamborghini Huracán EVO on a track – you’ve got the needle buried at 202 miles per hour. It’s an absolute blast; all 630 horses are running flat-out.

Time to brake, though, so you start to apply your high-tech $30,000 brakes… and quickly realize you’re not slowing down at all… and now there are two fireballs flaring up right about where your wheels should be, and you’re still not slowing down.

Next… it’s lights out.

It turns out, somewhere along the line, your $261,000 super machine was fitted with counterfeit brakes – someone just slapped a “Brembo” sticker on some generic, cheap factory-made brakes with a superficial resemblance to the real deal.

Okay, so this scenario is a little in-your-face, but you probably know bogus merchandise is a problem. The best estimates show counterfeiting is a $600 billion business worldwide – nearly 4% of all global trade sailing, flying, and rolling around the planet is BS.

The problem is only getting worse, growing by low single-digit percentages every year. What customs and postal agencies and other watchdogs manage to catch is a drop in the bucket.

What we have here is the perfect opportunity for a disruptive technology – specifically NFTs (Non Fungible Tokens) and the blockchain. And that means it’s a decent profit catalyst for Ether and other, smaller tokens, as well.

Let me give you a peek at the “tokenomics” of a fake-free future, and tell you what you can do to get ready…

This Goes Way Beyond Fake Rolexes and Coach Handbags

For the record, there is indeed a thriving illegal market for fake supercar brakes. When you can make a part for $100 and turn around and sell it for $30,000…

It’s alarmingly easy to come across fake goods on e-commerce platforms you trust, like Amazon or eBay. Heaven help you if you buy on Facebook Marketplace or Craigslist. Then there’s the neighborhood mechanic or pharmacist, too, and even the grocery store.

I’m talking about stuff we need to live – prescription and OTC medicines, baby formula, insulin syringes, food (yes, food). Consumer electronics and car parts – regular and exotic – too. I wouldn’t want to try to stop a Honda Accord with phony brakes, either.

At this point, if it sells for money, someone is selling a counterfeit of it.

And your immediate counterparty, whether it’s the pharmacist or the grocery cashier or mechanic might not have a clue; they could be selling you this stuff in perfectly good faith because this goes much, much further out across the supply chain.

And expecting customs or law enforcement to stop it… might as well ask them to stuff toothpaste back in the tube.

The blockchain, though, could conceivably stop it cold. When you absolutely, positively must have a guarantee or uniqueness and/or authenticity, it’s the gold standard.

I’m talking about NFTs – they’re way more than sketches of cats in sunglasses smoking reefer. They’re mostly digital assets right now, but what a lot of folks don’t realize is they can be directly tied to physical, real-world stuff you can put your hands on.

And now that the market for NFT art has, for all intents and purposes collapsed, some very smart people are looking around for ways to expand those use cases.

This really gets at the heart of one of my “Five Ts” of crypto investing – “tokenomics,” or the unique attributes that make a crypto valuable.

How NFTs Could Make All the Difference

Lamborghini backs (big surprise) a gran turismo racing team, Vincenzo Sospiri Racing – they’re much bigger in Europe than here in the United States.

VSR just announced a partnership with the NFT platform Go2NFT, to use blockchain tech to ensure the authenticity of every single part that goes into VSR racing machines. Every part will get a unique identifier, and every part will be encoded on the blockchain and accessible to everyone that needs to. In a statement to Cointelegraph, Sospiri himself said the VSR team will be able to “securely authenticate and audit every part of our racing fleet to monitor performance and ensure provenance.”

And so there’s the part, and the NFT that authenticates it. Put the two together and you’re resting easy.

On race day, when the pressure’s on, every driver and every member of the pit crew will be assured that the part they’re installing – or staking their life on – is 100% authentic and reliable. On that same blockchain, VSR will be able to market merchandise to its fans and open up new revenue streams.

Talk about an idea whose time has come. Before the blockchain, doing something like this would require forensics and a chain of paperwork that would choke a horse.

That’s the whole reason counterfeiting works. It’s what fast-buck artists are counting on – no one can possibly do all the work required to authenticate everything when global commerce moves as quickly as it does now.

But with the blockchain, it’s maybe 10 keystrokes and a click. So, the drivers and mechanics at VSR racing don’t have to sweat bogus parts anymore.

Instant, assured authentication. There’s no reason why you couldn’t use this tech to make sure you’re buying real Gucci loafers, or U.S. prime beef or real baby formula or anything.

What’s stopping everyone else? The benefits are glaringly obvious. Why racing parts and not baby formula or wristwatches. Well…

No good reason that I can see. It’s certainly true that our regulatory framework needs a bit of catching up to do; currently I can’t imagine the Consumer Product Safety Commission or U.S. Department of Agriculture or Health and Human Services are very hip to the potential here.

Even the Lummis-Gillibrand crypto bill – which is a remarkably far-sighted and intelligent effort at regulation, all things considered – doesn’t cover NFTs at all. It certainly doesn’t allow for the possibility that NFTs could be tied to tangible consumer goods.

This is definitely a case where hollering at your representative just might help, given the bipartisan interest in crypto and digital assets right now.

This Project Is Making “Authentic” Inroads

The Mattereum project looms large in the “real NFT” space – and smart contracts, too. They’re developing so-called “Real World Asset NFTs,” or “rwaNFTs,” which convey provenance and ownership rights of whatever physical asset you can think of. They’ve recently sold one of the original 14k gold “Mood Stone Rings” from the 1970s via rwaNFT, and the buyer can rest assured. There’s an original Andy Warhol coming up soon.

IG Wines is partnering with Mattereum to mint NFTs representing actual bottles of whiskies and fine wines, too.

Whisky – particularly the rare stuff – is shot through with counterfeits. I remember reading about a Hong Kong-based high-flyer who paid Chf10,000 ($10,300) for a single glass of “Macallan 1878” at a fancy hotel in Switzerland. Not long after it was proven that the booze was bogus. There’s no reason to believe your $30 bottle of Johnnie Walker Black is safe, either.

Remember, if it sells for money, it’s been counterfeited.

Andy Warhol paintings, fine whisky, and vintage mood rings aren’t stuff we need in our everyday lives… well, maybe the whisky… but as a proof of concept for rwaNFTs, you’ve got to admit it’s pretty compelling. This is a project I’ll have my eye on for the foreseeable future – I think, overall, proving authenticity of real good is going to be the defining feature of the NFT space.


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  • Source: https://aicinvestors.com/article/nfts-could-make-counterfeits-a-thing-of-the-past/

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