How to protect assets against counterfeit and fraud using blockchain
Counterfeit and fraud is a big problem globally. Today, 47% of your purchases are counterfeit (this is a recent study in the United States on the top 5 websites) and it is growing out of control. It drains an estimated $ 1.7 trillion from the global economy every year, expected to grow to $ 4.2 trillion by 2022. And it’s impacting everything. It’s impacting our medication, it’s impacting our electronics, even the microprocessor chips in mission critical systems. What Borsetta is doing is that we are leveraging advanced technology to defeat counterfeit and fraud and by doing that we are creating a new asset class.
Counterfeit and fraud on the rise
Three years ago, one of the companies we had launched was a high-end luxury brand and what we uncovered was one of the most corrupt and counterfeit. It was impossible to sell a product that was transparent, that you could truly give to the consumer and say we know who handcrafted this, we know that this design was not stolen, we know that this is really, truly recycled gold. That really spurred two and a half years ago, seeing how low tech that whole industry was, which really spurred the idea for Borsetta, and what we found was that it was just the tip of the iceberg.
Today, we have 23 billion Internet of Things (IoTs) and that’s growing to 75 billion by 2025. Every day we are wondering that if our data’s going to be stolen, our identity’s going to be stolen. Anything from our alarm systems at home to our refrigerators and our toasters – all can be hacked. This is where we truely believe that the fast growth of counterfeit and fraud may cause mayhem and havoc and keep us busy in the next couple of years. So, how do we counteract that?
The concern today is that in the United States, we have over 50% of all the microprocessor chips that are produced outside of our country, and with that there is concern especially on mission-critical systems that are impacting specifically our government.
Asset management with nano-tags
Let us take an example of an iPhone watch that is available on Amazon. How do you verify that it’s really an iPhone brand original watch, a second copy or a refurbished one. Is there any way to know if the hardware of the watch has been modified? Has the software been modified? Or even worse, is this watch is actually a surveillance device, and we don’t even know it? Is someone stealing my data without my consent?
The concept of Borsetta and how it works is that we have secured some unique microchip and nano tag IDs that will be embedded in the physical object. This creates a unique titled asset just like a title for your house or your car, and you can have all of your future purchases titled, so when you get a receipt in the future it’ll be do you want a title in your digital wallet for this particular item that you are purchasing? The one unique nano tag that we have is the world’s smallest microprocessor -10 microns so it’s very, very tiny and it has some unique encryption capabilities. It also has the ability that if someone’s trying to remove it it’ll self-destruct. You can’t reverse engineer it. This technology has come from Defense Advanced Research Projects Agency (DARPA) an agency of the United States Department of Defense. They spent the past 5 years and invested about 50 million dollars to come up with this unique chip to help counteract counterfeit and fraud. This is really the receipt of the future. That you will take control of an asset, you’ll be able to scan it, you’ll be able to know the provenance, where that watch came from, how it got to me and now I own that and control that in my own digital wallet.
Borsetta’s initial platform is an asset management platform. A working example of the platform can be understood with an Apple iPhone. We would issue a unique ID from the chip that actually get secured on the blockchain and initiates the ‘Title’ for the ‘Asset’. As the product goes through the supply chain, that Nano ID is scanned and documented all along its journey.
This is how the platform is set up from a payment’s perspective – there’s a small fee to Title the Asset and then tiny micropayments as it’s secured along the supply chain. So, when you get the product/asset, you know from where it came and how it reached you.
When we look at our platform (we’ve just filed our non-provisional patent recently for it) we will get it as an array of markers and we actually will have a scoring algorithm to that title, and that will determine the evaluation of that Asset. So the particular Asset had a unique microprocessor, we also have a very small unclonable signature that’s embedded and is 250 times smaller than the microprocessor, it has something unique that is literally impossible to counterfeit. So, if it’s an Intel chip it’s actually their logo that can’t be altered. We have some Nano inks which is like the new bar code, so it’s invisible ink. It’s an array of markers we look at over time, we also have what we call is the ‘System’ – it’s an Asset on a chip. That’s really our platform perspective that we look at an array of markers, so if somebody is uploading something that’s a QR code or an RFID, it’ll just going to have a lower score than others.
Go to market plan
In our ‘Go to Market’ plan, we are targeting what we call high value Assets in mission-critical applications, we have some really exciting initiatives happening with the US government. The Government is very proactive now at trying to get a little more involved with securing Assets on the Blockchain.
There is the amazing team that I have in New York, Washington, San Francisco, and now the extended team with Accion Labs that we are very excited to work with.
When we look at Borsetta’s Asset management platform we’re Blockchain agnostic, we’re focused on our clients and supporting them, whether its permission or permission-less Blockchain. We have some Assets secured on STELLAR. We’ll be rolling out likely with our first project on HYPERLEDGER, we are also securing two other unique identifiers from the University of Florida, one that can actually be physically embedded in the pill itself. There is a project that we will be doing with the Air Force. The Air Force ran an initiative challenge and Borsetta came in first, we had the most votes. It’s our chance to basically produce a new system on a chip for any autonomous platform. Part of that is, that we are gaining IP support from ARM, from Cadence, from Synopsys, Draper Labs a part of spinoff of MIT, so, we have some unique IP on our chip from all these companies. We should be getting that project here in a couple of weeks.