When most people hear the word blockchain, they tend to think of Bitcoin, the decentralized virtual currency that has risen in value exponentially over the past few years. While blockchain technology is best known for supporting virtual payments and other financial applications, other uses are rapidly being developed across every sector of the economy, and fashion figures are beginning to discover that the possibilities presented by blockchain could serve to addressing some of the industry’s most pressing issues – from supply chain mismanagement to counterfeiting.
In the simplest of terms, a blockchain is a shared database or digital ledger that automatically updates information across an entire network, without the need for a central intermediary. When a user enters information in the ledger, that entry becomes linked to every other entry, or “block,” and every other copy of the ledger is automatically synchronized via the internet. The connection among all the blocks in the “chain” makes the ledger unhackable, at least in theory, because a hacker trying to alter a single transaction or entry would have to alter every other link in the chain as well. The distributed nature of blockchain also makes it transparent, because every user can see the entire history of entries in the ledger.
Companies are already using this technology to verify digital identities, enable “smart” contracts that execute automatically, and track shipments of goods around the world. Walmart, for example, is using IBM’s blockchain platform to track food shipments as part of an initiative to improve safety, and the diamond industry is using Everledger’s blockchain to verify the source and unique attributes of diamonds.
Blockchain has obvious potential in the fashion industry, which could benefit significantly from the application of such technology to supply chain and inventory management, the latter of which represents “one of the [fashion industry’s] biggest challenges,” according to Fabio Cesari, the head of research and development at YOOX NET-A-PORTER GROUP, a company that is consistently at the forefront of technological advancements in retail.
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