Along came a chain of blocks …
In 2019 Nike adopted blockchain technology in their race against counterfeiting. Blockchain is a distributed ledger technology (aka a replicated database which has no master or slave). This ensured that every information updated in blockchain cannot be hacked into a single database (or node). Blockchain as a technology enabled every node in the chain to be a “golden” master copy of information.
Nike introduced blockchain based CrytoKicks platform which consumers could use to verify authenticity of a Nike product. As the saying goes “the weakest link in the chain can bring down the whole chain” and so was the case of blockchain. Blockchain solutions for physical products relied on a scannable 2D barcode. The 2D barcodes are like the gateway to the blockchain world. The challenge was that 2D barcodes (QR Code, Data Matrix) are similar to RFID and were meant to be just tracking code with no inbuilt security. This meant that they were just as easily duplicated leading to the underperformance of blockchain. This was not just at Nike but with every brand that relied on blockchain for protecting their physical products.
“Blockchain with QR Code is like buying the most expensive & secure value but locking the vault with a padlock.”
In 2019, Nike sued a Chinese company for selling counterfeit Nike products on Amazon.
The company was awarded $150 million in damages. This was when RFID was giving way to Blockchain as the security solution at Nike.
MetaVerse, Web3 and more digital
This time Nike moved into the world of Non-Fungible Tokens (NFTs). With Metaverse and Web3 hype in the early part of this decade, this was the most trendy technology for any brand. NFT was meant to establish “ownership” of data in the digital to digital space. Web3 is like a curry – a merger of ideas; a potent mix of blockchain, data ownership & so on and so forth.
In 2021, Nike and its subsidiary Converse sued roughly 600 websites selling knockoff trainers, highlighting the necessity of continual watchfulness online. Blockchain went broke on Nike and no longer provided the security it was sold on.
Nike did as any company of wisdom would, decided to move to the next thing – dive into the world of NFT. While NFTs were meant to be security for digital to digital interaction, Nike was sold on the same solution (our guess) for physical to digital interaction. The gateway for physical to digital was still the humble (and easily duplicated) 2D barcode used with blockchain technology.
Meta (Facebook, in its previous avatar) showcased a vision that the world was going to be entirely digital and every interaction (including social) was going to be digital going forward. We are yet to see a world where social animals like humans are going to isolate themselves entirely from physical contact. Just when the hype was at its downward trajectory, Meta quietly shelved the project. Maybe the (forced physical separation) social norms in the early Covid period of 2020 and 2021 were mistaken to be the new normal forever.
While the social media giant has shelved its dream of a Metaverse, Nike may be recovering from its adventures with NFT for product authentication. We are yet to hear of a new technology from Nike, for all we know that we may not have to wait that long because the fundamentals are still weak in solution terms.
At NOOS, we rely on first principles to build any solution. For authentication of physical products, the physical interface to the digital world needs to be secure to protect the entire chain. Solutions like SCoT and ScAI are designed to be the fundamental security block that serves to protect the entire digital landscape. Our secure codes cannot be re-created or replicated ensuring that the key to the (block)chain is protected at the layer (physical) which is most exposed to duplication.
It goes without saying that Nike has been attempting to protect its customers from counterfeiting for the last 4 decades. It has not shied away from spending money on a technology in its initial years when it is most expensive. Their interest in adopting the latest and greatest technology has led solution providers to sell non-optimal solutions which work only in lab conditions. Some of the solutions adopted by Nike have helped with its marketing campaign and brand awareness, they have served a poor crossover choice of anti counterfeit solution.