Seal is the best way for anyone to check if a product is genuine or fake. Seal combines NFC chips, which are embedded into physical products, the Seal app, and the Seal Network to provide a fast, simple, and secure way to provide products authenticity and other services.
By facilitating a secure tokenized version of a physical product, Seal allows product-specific services to operate such as transferring ownership, theft prevention, insurance, but also brand activation campaigns and product analytics. Seal lets brands earn money every time their products change owners. For the first time in history, brands can earn money from items sold through the secondhand trade, while simultaneously protecting their markets from counterfeiters. Using the power of the blockchain, authenticity can be checked and ownership can be transferred decades from now, even if the product itself is discontinued, as long as people contribute to the decentralized Seal network. Seal wants to bring back confidence to consumers and allow for brands to interact with their most heavily vested customers in the most direct way the internet has ever seen. Together, they build a better world in which consumers appreciate the creative work of makers and stop feeding the counterfeit economy.
SCOPE OF THE PROBLEM
In its essence, counterfeiting is the arbitrage of a product’s extrinsic value. A brand’s sensitivity to counterfeiting depends on the extrinsic value of its products. Extrinsic value is usually derived from brand equity but it can also be derived from other sources such as certifications in the case of medicine.
Counterfeiters target both primary market and secondary markets. In primary markets prices are similar to authentic products. In secondary markets prices may vary widely (Note: The secondary market is not the same as the secondhand market). According to a study by the OECD, counterfeit Ray-Ban sunglasses, Rolex watches, Louis Vuitton bags and Nike shoes with very low prices target the secondary submarket. In this submarket the prices are substantially reduced when compared to the original because consumers seek IP infringing products intentionally (OECD, 2016, p55-138). Products may be advertised as proxies or replicas when sellers do not pretend that the product is authentic. Instead, the seller may argue that the product is of similar quality to the original. Although Seal cannot address this segment of the market directly, it can be addressed by the use of Seal by customs control.
Today, many anti-counterfeiting methods exist. Some of these include watermarks, security threads, invisible ultra-violet inks, color-shifting inks, holograms, product numbering, fluorescent fiber, Moiré patterns, micro-print and many others. Anti-counterfeiting is an endless cat- and-mouse game between counterfeiters and security specialists. Inevitably, all offline authentication methods become compromised, as long as a sufficiently large financial motive exists. The aforementioned methods vary in sophistication. One problem is that specialized training is often required to appraise whether or not the more sophisticated anti-counterfeiting methods are violated. Consumers are still victims because they do not have the knowledge to distinguish genuine products from fakes.
The Seal token is an ERC20 token built on top of Ethereum that works in conjunction with NFC-chips. Seal aims to be the authoritative platform that millions of people can count on when acquiring new or used products. After carefully inspecting the blockchain landscape they have chosen Ethereum to launch Seal. The following considerations were taken into account to come to this decision.
Scalability is still a challenge for Bitcoin and Ethereum, but each are working on solutions to scale network throughput and increase transaction speed. Lightning, Raiden and Plasma each attempt to remedy the current issues that prevent wider industry adoption. Vitalik Buterin’s envisioned Ethereum roadmap includes sharding as a way to address the current scalability issues. On top of this, native smart contracting is an attractive reason to adopt Ethereum. Seal is a member of the Enterprise Ethereum Alliance.
They want to have the ability to embed smart contract logic into their solutions. Ethereum is by far the most popular smart contract blockchain available. Several other projects such as Neo, EOS and Stratis also exist, but they believe that Ethereum has the best support. Rootstock also offers a smart contracting alternative compatible with Bitcoin. While they recognize Rootstock’s potential their experience with Ethereum gives us more confidence that they can build productionready smart contracts in a timely and secure fashion.