Blockchain technology can aid in the discovery of fake products by offering a tamper-proof and transparent record of the entire supply chain, making it simpler to trace and verify the authenticity of products and enabling the prompt identification of any fraudulent activity.
Blockchain technology can be used to increase supply chain traceability and transparency, which can aid in identifying and stopping the sale of counterfeit goods. Blockchain establishes an immutable and transparent record of a product’s path from maker to end-user by documenting every transaction and movement of a product on a decentralized ledger.
Let’s use the supply chains for medications as an example. According to the World Health Organization, one in 10 medical products — e.g., medicines — in developing nations are fake, and this issue is equally common in developed nations. By establishing a safe and transparent supply chain for medications using blockchain technology, it will be simpler to identify and stop the distribution of fake medications.
Every time a drug changes hands in a supply chain built on blockchain technology, the transaction is documented on the blockchain, producing a transparent and unchangeable trail of the product’s travels. Cryptographic hashes are used to safeguard the records, making it hard for anyone to alter the records without being noticed.
Smart contracts can also be used to automate supply chain verification and validation, guaranteeing that the product has not been tampered with or deviated from its intended path. In the case that a false product is discovered, smart contracts can also automatically send out alerts, enabling prompt action to stop its future distribution.
For instance, a company called Chronicled developed MediLedger, a blockchain-based solution for the pharmaceutical sector. MediLedger tracks the flow of medications from the producer to the consumer using blockchain technology, producing a transparent and immutable record of each transaction. With the detection of fake medications and their exclusion from the supply chain, this system helps to protect patient safety and medication efficacy.
Here are some steps in a blockchain-based medicine supply chain that can be tracked to prevent the circulation of counterfeit drugs:
- Manufacturer: The company that creates and packages the medication also logs the specifics of that process on the blockchain.
- Distributor: The medicine is then transported to the distributor, which records the receipt of the medicine and its movement on the blockchain.
- Wholesaler: The wholesaler collects the medication from the distributor, checks its legitimacy, and records its journey on the blockchain.
- Pharmacy: After receiving the medication from the wholesaler, the pharmacy checks its legitimacy and documents its movement on the blockchain.
- End-user: After the medication has been purchased, the end-user can scan the blockchain-based QR code on the packaging to confirm its legitimacy.
Therefore, blockchain technology makes it possible to track every step of the supply chain, making it simpler to spot any fraud or tampering with the medicine. This can assist in identifying and stopping the distribution of fake medications and ensuring that only real medicines get to the end users.
Related: What are the applications of NFTs in supply chains?
