Pamplin Media Group – Blockchain and bootleggers


Can the registry be used to authenticate car parts or is it more suitable for financing and complex markets?

COURTESY: BONAFI - The Bonafi sticker contains a near-field frequency chip that tracks information and sends it to a blockchain network. This simplifies the monitoring of auto parts and confirms their authenticity.

The launch of Oregon Blockchain Venture Studio raises some questions about the blockchain, the "distributed ledger" technology behind cryptocurrencies like Bitcoin and Ethereum.

OBVS is an incubator program hosted by the R / GA digital agency. Investment partners include Business Oregon (state), Intel, Nike, Oregon Health and Science University, Portland State University and the Smith + Crown blockchain research organization. The companies chosen by the firm will receive $ 100,000 in capital.

Oregon is in front of places like Malta in the Mediterranean. The tiny island becomes a center of blockchain, attracting companies like Binance or Bitbay, two recognized exchanges.

Companies in the United States are flocking to the blockchain. Take, for example, Bonafi, a seven-person startup in Valencia near Los Angeles. Their technology is designed to stop the use of counterfeit car parts. Apparently, it is normal for a mechanic to pay the full price and then install a perfectly packaged BMW part without knowing that it is an unauthorized copy.

Bonafi's staff designed a quarter-sized sticker containing a near-field radiofrequency chip. The stick can be attached to the product packaging. Use the same technology as Apple Pay and Samsung Pay. It does not need energy. A scanner or smartphone provides power when scanning the chip.

"The chip contains the position, the time, the date, the product information, the serial number, the description, when the package starts, when it arrives, when it passes through the ports …" L & # 39; CEO Steve Kuh explained to the Business Tribune.

"So all the information is recorded on blockchain so that nobody can touch them, or if they do they can understand that it has been tampered with."

A blockchain is a shared and encrypted database in which each field is visible to all those who use it. Nobody can change anything without possessing the cryptographic key. Nobody can change anything without the knowledge of everyone else. This is called a "trustless" environment, as users trust technology rather than one.

"At the end of the day someone with a phone app can scan a product and see if it's genuine." The phone app simplifies the use of the platform we're creating. It solves a problem for the customer to find out if it's real part. "


Counterfeit brake discs have been shown to have longer stopping distances than actual ones, and even counterfeit airbags have been found to be faulty and dangerous.

"This technology is also useful in other sectors: pharmaceuticals, electronics, food … You always hear about lettuce that has gone wrong, or the meat that started in Nebraska and you do not know where it went. access to who used it. "He said that many of them do not know how to make an accurate reminder. "They have to resort to traditional news to let people know."

Kuh argues that the technology could allow health officials to trace a pest or food-borne bacteria back to their origin and allow more accurate appeals.

Initially the company thought it was possible to authenticate signed bags, which are often smuggled. Then they realized that the pharmaceutical industry, at $ 200 billion a year, is the biggest damaged. The next major markets are electronics, then food.

More consumers are demanding the Bonafi chip, designed by ST Microelectronics and manufactured by NXP, a large semiconductor company, the less they sell counterfeit products. They cost about 25 cents apiece.

Bonafi chose the automotive industry because one of the technical managers had worked providing parts to the Hyundai. No manufacturer has yet signed.

"It takes a long time to convince big car manufacturers to register."

Kuh says they are using Hyperledger's open source blockchain infrastructure. The Hyperledger website says: "Think of (Hyperledger) as an operating system for markets, data sharing networks, micro-currencies and decentralized digital communities, has the potential to greatly reduce the costs and complexity of things in the world real.

"It was built by IBM and is supported by hundreds of companies: it is a well-defined platform, unlike Ethereum or Bitcoin, it works faster and is well suited to data applications like us.

"Ethereum and bitcoins are payment oriented, ours is more control and transfer," says Kuh.

However, it is not plug-and-play. It still takes a team of engineers. "It's like the Internet in the early 90's. It was built by the government 20 years earlier and it was not until Netscape came out with an interface that became easy for consumers to use. we are trying to do ".

COURTESY: BONAFI - The CEO of Bonafi, Steve Kuh, is targeting unauthorized autopart pieces with blockchain

Engineers necessary

The business model is a token reward system. "We expect buyers to be interested in communicating with the producers of the product: manufacturers will reward buyers to provide feedback to users: they have appreciated taste, color, good fashion …"

Consumers are becoming smarter in allowing people to know what they want, which is leading to big data monetization. "We are allowing producers to interact more closely with consumers."

Prizes could be 10 cents on a bottle of wine, or several dollars for a cell phone.

The producers would send a Bona token to the consumer as a thank you for scanning and feedback, and these could be purchased and cashed in a stock exchange, like stocks.

He points out that since the SEC regulations are blocked in the 30s, no security token exchange has yet been built in the United States.

"They're playing catch up, but that's how it goes," he says.

To build a blockchain database integrated with a service it still takes an army of people, he says. For example, to create a StubHub-style ticketing service, "It's probably a one-year job for at least five people."

Stop the switches

Not so fast, says Shidan Gouran. He is President and CEO of Global Blockchain Technologies Corp, an investment company with an incubator in Vancouver B.C. (Gouran pulled out his first Bitcoin at the start of 2010 and has been involved with Cryptocurrencies since then).

"Blockchain is actually just a database: last year everyone thought that they applied to them but it did not," Gouran told the Business Tribune.

He says that the place for blockchain is "in a system with a lot of individual and independent companies, where no one trusts the other, where you want a database not owned by a group. Common, like air and water and where everyone has access to read and write in the database and no one can lie. "

This makes it suitable for payment networks, finance and supply chains.

"I do not think it would start with Nike and those people," he said. "It starts from the point of view of the government". His company is working with the government of Dubai for a commercial and financial organization for the port of Dubai, which has all its ports connected via blockchain, for shipping and supply of letters of credit.


"Start from there, with big manufacturers, oil companies or companies of import and export."

Another example is computer storage. He says that legacy companies like HP and IBM "have completely lost the Amazon Web Services and Azure market of Microsoft, but they can be bothered by themselves." With blockchain, you can create a peer-to-peer marketplace with no trust in buying and selling. in the sale of storage ".

Normally it is difficult for the departments of a large company like IBM to borrow the excess capacity one from the other, because security and accounting must be involved and it will be easier to go to the # 39; Outside in a company like AWS. With blockchain, "Accounting is automated, security is automated, it's a big deal within the company."

"So Azure and AWS become a user interface on the network and the search engine becomes more important than the nodes, we're back on a decentralized website."

He says that with blockchain anyone can build an Amazon or Facebook, and this threatens big interruptions of the status quo.

"Artificial intelligence is not disrupting, because they have more data and engineers better than you, but to take the database and make it a commonplace, which upsets the world in the way the Internet initially worked".

He adds that it is still the first days. "We're far from this now, we're in 1992."

Joseph Gallivan
Reporter, The Business Tribune
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