Updated: Oct 19, 2020
Blockchain has become one of the most important buzz words in the technology sphere. This new technology created a lot of hype, as it has been predicted to be the next industrial revolution in many industries .
1. The Blockchain in a nutshell:
Blockchain is the technology behind virtual currencies such as Bitcoin. In its simplest terms, Blockchain can be defined as a collection of linked/chained records verified by a decentralized and distributed network of computers (see image 1), which makes records strongly resistant to alteration and counterfeiting as they are protected using cryptography.
2. Blockchain at the intersection of fashion and luxury
Did you know that Blockchain and the fashion & luxury industry are actually quite similar (see image 2)?
One characteristic that both have in common is uniqueness: Luxury brands have a unique stylistic identity . Similarly, the decentralized nature of the Blockchain makes counterfeits of cryptocurrencies almost impossible.
Another similarity lies in their management of scarcity: Luxury car manufacturer Ferrari for instance, always delivers "one car less than market demand" . Likewise, cryptocurrencies are also scarce as their supply is limited .
The last characteristic common characteristic is history/heritage and storytelling. Many luxury brands, such as Bulgari or Gucci, have a rich heritage (see image 3) used for storytelling . In this regard, a best practice is Louis Vuitton (see image 4) with their Art of Travel storytelling . The Blockchain itself engages in storytelling.
3. Blockchain could achieve what the fashion industry failed to accomplish:
Supply Chain Transparency
One very promising application of Blockchain in the fashion industry lies in supply chain management.
H&M's code of conduct does not allow child labour , but how can we know that their products have not been produced in a sweatshop ?
Here Blockchain comes into play. It functions like a shared Google Doc : Customers could scan a code on their clothes to retrieve the chronological history of all value-adding steps involved from the raw fibre to the finished product (see image 5).
4. Limitations and conclusion
I believe that Blockchain could accomplish in the digital sphere what fashion & luxury can already do in the physical world. However, Blockchain's broader success will most likely depend on whether we can find a solution for the complex policy questions and excessive energy consumption that still surround Blockchain. Once solved, the massive potential of Blockchain becomes immediately evident.
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