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NFT applications in supply chain

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Jamaica Blue Mountain is one of the most expensive coffees in the world. It is cultivated from extremely rare coffee beans found in the volcanic Blue Mountain region. Combine this scarcity with its highly sought-after rich aroma, and one thing is inevitable: it is also the most sought-after coffee for fraudulent trade and counterfeiting.

This refers to a common problem in supply chains, especially for scarce, luxury items and also for health related products such as medicine and all kinds of food. Methods for detecting counterfeit products are often inadequate.

Obu, an exporter from Jamaica’s Blue Mountains, has come up with an effective solution using blockchain to authenticate their coffee beans. The company assigns an NFT to each coffee barrel, where metadata includes product details from picking, sorting and transportation. Thanks to the blockchain technology that fuels NFTs, end users can track their coffee beans via unique codes. As a result, not only are customers assured that the coffees are genuine, but local small farmers also have the opportunity to develop long-term business relationships.

How does NFT work in the supply chain?

The approach adopted by Oubu represents how NFTs are commonly applied to solve supply chain authentication problems.

Whether it’s a fashion item, a bottle of wine, or exclusive jewelry, each product in the system gets its own NFT with additional information provided in its metadata, allowing supply chain operators and managers to micro-inspect their product’s journey. layer

As a result, each product gets a certificate of authenticity and origin irrevocably registered on the blockchain. A certification example issued by Chai Vault, a Anti-fraud solutions for wine and spiritsCan be seen here.

Like Chai Vault, other technology companies dedicated to solving supply chain problems with NFT solutions are hard at work. One of them is Everledger. The company allows its customers to create NFTs without coding knowledge with Everledger Identity, which adds product metadata and a minting service. To reduce NFT minting costs, Everledger uses proof-of-authority consensus where only authorized network validators can verify transactions.

How do physical products connect to NFTs in a trusted way?

There are several options for doing this. For example, Everledger uses intelligent labels with mobile device interactions to enable traceability and provenance tracking. Here, it uses a technology called NFC (Near Field Communication), where each label has a unique serialized online identity.

NFC is a common way of tagging products and connecting them with NFTs Companies can use QR codes instead of NFC for the same purpose. However, they are easy to copy. On the other hand, an NFC tag stores a key that is used to generate a unique code on each scan. These codes are verifiable on the server which proves the authenticity of the linked physical object. Just as an NFT does not store the asset underlying it but only a link to it, NFC does not hold the NFT; Instead only creates a link to the physical product.

Another widespread tagging method is RFID (radio frequency identification). While NFC technology requires scanning a physical product label with a smartphone or tablet over a short distance, RFID can work over longer distances and read many tags simultaneously.

So, why are NFTs essential in the supply chain?

So, why not just link the physical product to a label using RFID or NFC if they can already prove that the linked products are genuine?

Because in addition to being unique, NFTs are also immutable on the blockchain, so we can monitor the complete history of all transactions related to the product.

Also, companies can create stronger connections with their audiences because they are an integral part of contemporary culture.

Furthermore, because they grant ownership, new utilities that are beyond the bounds of label technology are possible.



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