Blockchain Technology Advances to Avoid Retail Burglary

    Tanya Sharma
    Tanya Sharma
    Published on January 10, 2023 3:14 PM

    Updated on January 16, 2023 7:36 AM

    When it comes to anti-theft measures for retailers, blockchain technology could be a solution.
    Blockchain Technology Advances to Avoid Retail Burglary
    Source: Unsplash

    As the cost of retail fraud rises year after year, merchants are continuously looking for new solutions to address security concerns while reducing their liability burden. With the ability to establish secure digital wallets, Blockchain technology provides exciting potential answers.

    Lowe's has introduced a new solution built in its Innovation Labs division that uses RFID chips and the blockchain to prevent retail theft in a way that is undetectable to customers.

    The new technology, known as Project Unlock, uses low-cost RFID chips and IoT sensors to activate power tools at the point of purchase while also producing a secure, publicly accessible, and anonymized blockchain record of authorized purchases.

    The second component of the system is a transparent purchase record, which will assist retailers, manufacturers, and law enforcement in authenticating and validating ownership. When a buyer purchases goods, the transaction is recorded on the blockchain. 

    The records, which contain no personal information about the customers, can then be examined by anyone. Resellers, such as marketplaces, can, for example, check the record to guarantee they are not purchasing a stolen item. To make this work, each physical product has its own NFT.

    Project Unlock will initially be deployed in Lowe's stores across its power tool assortment to provide proof of concept, but a Lowe's spokesperson stated that the company "sees potential to use this invisible blockchain and RFID system for other items in its stores and across the entire retail ecosystem."

    Related Read: What is Blockchain and How does it Work?

    Similar Blockchain Solution as Project Unlock

    While the notion of Project Unlock is novel for a huge retailer, David Menard, CEO of asset verification platform Real Items, told that his company is looking into a similar solution. "Historically, RFID tags have prevented theft, thus this problem has already been solved," he explained. Menard observed that Real Items blends digital identification with tangible products to ensure that stolen items can be traced. He stated:

    “If physical items are paired with digital twins, then retailers can know exactly what was stolen, from where and from which product batch. Retailers can understand this with more clarity versus information generated by RFID systems.”

    According to Menard, Real Items currently has an MOU with SmartLabel, a digital platform that generates QR codes for brands and retailers to deliver extensive product information to consumers. Real Items intends to use "digital product passports" with SmartLabel items in the future, he said. "We see digital product passports as the cornerstone for keeping product information throughout the product's life cycle," he says.

    Menard went on to say that Real Items stores product information on the Polygon network. It's vital to note that this concept differs from Project Unlock in that a blockchain network is only utilized to record information about a specific object in this case. "For interaction, we leverage a product's digital twin, often known as its NFT.

    While Lowe's Innovation Labs and Real Items' ideas could be game changers for shops, the advent of the metaverse may also assist decrease retail theft.

    Also Read: Blockchain Bonds: A Cost-Friendly Investment

    KYC Through Blockchain

    Know-your-customer requirements were created to protect both financial organizations and individuals from engaging in fraudulent transactions. Though the emphasis is on increased security, the extensive data being recorded and kept has made thieves an easy target. According to a survey conducted by Javelin Strategy & Research, the yearly cost of fraud climbed for the third year in a row, reaching $16.8 billion in 2017.

    Criminals can now use a card to make purchases while posing as the card's owner. With billions of dollars lost to fraud each year, it's easy to assume that the existing checkpoints aren't adequately validating that the purchaser is the person whose name is on the card. 

    A blockchain-powered sovereign identity would take KYC to the next level by allowing businesses to trust credentials supplied by consumers that have been issued by known institutions. In many of these cases, such as showing ID at a bar, no actual data is required to be transferred. Instead, it only needs to be confirmed to the recipient's satisfaction.

    The Indy system is self-sovereign, which implies that a person or organization can accumulate a lifetime's worth of identity data while maintaining ownership and participating in any transactions that involve it. It significantly reduces the likelihood of identity theft and eliminates the need for businesses to maintain personal data.

    The process is made feasible by decentralized blockchain technology, which is also rapid and accurate. KYC would become decentralized, removing the need for consumers and merchants to rely on centralized agencies to manage personal information. Security shifts from data aggregators to the root owner by providing a digital system that validates you are who you say you are at the time of purchase.

    Blockchain FAQs

    How is a blockchain owned?

    Simply stated, everyone owns blockchain technology even if no one owns it. One of the distinguishing characteristics of blockchain technology is this common ownership and responsibility, which gives blockchains a high level of security and immutability.

    Can blockchain be hacked?

    A blockchain might be taken over by an attacker—or group of attackers—if they have the majority of its hash rate or computing power. A so-called 51% assault allows for the introduction of a modified blockchain if the attackers control more than 50% of the hash rate.

    What is the biggest problem of blockchain?

    Blockchain's major issue is scalability. Blockchains are challenging to grow because of their redundancy. From the genesis block to the most current transaction, every device in your network must have a copy of every action taken. That entails reproducing the same data hundreds of times.