Fashion And Technology: How Blockchain Helps Fight Counterfeits

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With the emergence of cryptocurrencies, we were introduced to innovative blockchain technology. In just over a decade, blockchain has given birth to an entire industry spanning finances, supply chain, gaming, and many other sectors. 

Since the introduction of smart contracts to this ecosystem, blockchain became much more than just a network where investors could purchase bitcoin. Today, this tech allows us to record data in an immutable and transparent manner. Furthermore, it allows us to automate supply chains which can help us immensely in the fashion industry. 

In this article, we take a look at some of the advantages of blockchain technology and how these can be directly applied to the textile sector to fight counterfeit items. To this end, we will introduce you to the concept of NFTs and their usage in this industry. 

Blockchain tech – the basics

Blockchain was initially created to record the transactions on the Bitcoin network. This distributed ledger of transactions allows users to participate in a permissionless peer-to-peer network for exchanging value over the internet. 

Its main characteristics are that these transactions are immutable and transparent, free for anyone to consult at any given time. This makes the network inherently secure and resistant to any kind of modification. 

Another important blockchain characteristic that emanates from its decentralization and transparency is the ability to track records on its network. Every asset recorded on the blockchain can be easily retraced back to its origin and its current state consulted at will. 

Smart contracts and the emergence of NFTs

Moreover, since smart contracts were introduced, blockchains can be programmed to execute a wide range of tasks once certain conditions are met. In addition to these dApps,  smart contracts also allow for the creation of specialized tokens, both fungible and non-fungible (NFTs). 

You are most likely already familiar with fungible tokens, such as the ERC-20 tokens on the Ethereum network. Fungible tokens of the same type can be seamlessly interchanged for one another as they are indistinguishable from one another and have the exact same value. 

NFTs on the other hand, are unique and cannot be exchanged for one another. They contain a set of specific values that differentiate them from other NFTs and can be used to tokenize almost anything of value in the real world. 

For example, NFTs can be used to make digital collectibles or, more specific to our case, used to represent a piece of unique clothing. 

How NFTs can be used in the fashion industry

Today, fashion is plagued with counterfeit items, where fakes have reaching an astonishing number of a $500 billion industry. Considering the current price of cryptocurrencies, this number is over a third of the entire crypto market. With this number continuously rising, fashion producers are indubitably interested in finding solutions to this issue. 

Blockchain, and more particularly NFTs could be the long-awaited remedy to fight fakes in fashion. Thanks to their ability to represent unique characteristics and embed them in their metadata, every piece of clothing could be registered as an NFT on the blockchain. 

Below is just a sample of the benefits that NFTs could bring to all participants in the industry. 

Supply chain tracking

NFTs can be used in tandem with RFID sensors to track every piece of clothing in the supply chain, from the producer to the consumer. Additionally, RFID can be used with blockchain technology and connected to the Internet of Things (IoT) to provide full automation of the process. 

Every change of state can be automatically recorded on the blockchain, allowing for traceability and reducing the chance of fraud considerably. Moreover, this technology can be applied to sourcing the materials themselves.

Proof of origin

Proof of origin is extremely important in the fashion industry, especially regarding more luxurious clothing items. Thanks to the traceability of NFTs, the customer will be able to assess the origin of every piece of clothing they buy, just by scanning a QR code on their label. 

Moreover, because this data is recorded on the blockchain, it cannot be modified, hacked, or faked. Consequently, the trust between the customer and the brand will increase, ultimately increasing sales.  

Proof of ownership

Finally, NFTs can also provide proof of ownership to the customers themselves. Once they are purchased, the customer can be registered as the owner of this piece of clothing and be handed the private key to their NFT. 

Once they decide to resell their item, they can provide this proof, as well as the proof of origin, increasing the resale value. The second-hand buyer will also benefit from this as they will be ensured to receive an original piece instead of a fake.  

Real-world use cases

While, in the past, fashion brands have used certificates of originality to help their customers recognize genuine items from fakes, the latter keeps getting better and better. Naturally, this makes the difference between authentic and counterfeit products smaller, which in turn hurts business.

When it comes to luxury fashion, Cartier, LVMH and Prada have formed a joint blockchain department to deal with the issue. Their focus lies on the development of a supply chain management based on the blockchain, to help participating brands create unique identifiers for their products. It also helps customers track the product’s history, as well as its sourcing. 

Some fashion icons, like Sunny Lu (ex. CIO Luis Vutton China) has gone as far as to create his own supply management crypto project specifically focused on luxury brand authentication.

VeChain (token name VET) is now growing rapidly, having formed partnerships with the likes of BMW, Walmart, DB Schenker, and others.


The fashion industry is plagued by fakes. These counterfeit items cause huge losses to the producers, but also the consumers, who pay top price for low-quality items with no proof of origin. 

Blockchain, with the help of NFTs, could put an end to this shady business. NFTs can provide better visibility for the items in the supply chain and allow customers to easily check the origin of the items themselves. As blockchain technology experiences mass adoption, NFTs should be used at a greater scale to fight counterfeit items in the fashion industry. 

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