Luxury brand LV, the owner of the iconic Louis Vuitton brand, is preparing to launch a blockchain to prove the authenticity of high-priced goods, CoinDesk learned.
According to two people familiar with the project, LV has recruited a full-time blockchain team that has been in secret mode for more than a year, working closely with Ethereum design studios ConsenSys and Microsoft Azure.
AURA is built using a licensed version of the Ethereum blockchain called Quorum, which focuses on data privacy and was developed by JPMorgan Chase.
In the official start of the project, LV controls more than 60 luxury brands, including many well-known brands such as Dior, DomPérignon and Hublot. The group reported revenue of $53 billion in 2018.
But it is not the first to propose a true tracking blockchain, as well as other luxury origin platforms and mini consortia such as Arianee or Vechain.
Based on the sources involved in the project, LV questioned why it allowed third parties to position between their brands and partners - especially since the blockchain should be an intermediary-eliminating technology.
The source added: "This should take the form of an industry alliance rather than a third-party actor entering the market."
Therefore, LV intends to provide services to other brands in the form of white labels, including the group's competitors. Therefore, AURA does not create some type of application, but uses it to support the brand.
The source explained: "So if you are a luxury brand customer, you will not see AURA, you will see Louis Vuitton's app or another luxury brand app."
In theory, this sounds great. But getting competitors into the blockchain platform can be tricky, especially if you happen to be as big and influential as LV.
In order to avoid problems encountered by blockchain companies between IBM and Maersk, LV will donate all intellectual property (IP) to a separate entity, which in turn will be owned by participating brands, the source said: "For example Gucci can decide to join the platform and become a shareholder - in this case, their claims on intellectual property will be as big as Louis Vuitton's claim to IP. This is the main difference between the project and the IBM Maersk project. It is expected to be more comparable to the trade finance consortium Komgo."
In addition, Quorum's data privacy tools should ensure that no information is disclosed between the brand or its customers.
According to the news, the project further promotes cooperation between enterprises, which is in line with the standards of the luxury goods industry, especially the anti-counterfeiting work of the European Intellectual Property Office.
It is not surprising that LV chose the Ethereum for the enterprise category because it is the blockchain that produces the ERC-721 Non-Substitute Mark (NFT) standard. This allows the digital representation to be not only immutable, but also to provide a unique, unique item of logo.
Although the most famous example of NFT is the whimsical game CryptoKitties, this brand has serious commercial potential.
For example, it can be envisaged to identify a single handbag and track the entire life cycle of it from a crocodile farm to a first-selling store, followed by multiple owner chains that own and sell it.
Another fundamental reason for LV's choice of Ethereum is that the group believes that today's licensed version is only an intermediate step in a more ambitious vision. Once the technology is mature, the source said that "they [LV] see permissions and public networks as needed. Interoperable lines, if they want to give back to the customer. This is also a way for distributors and distributors to connect to the network without restrictions."
