Fashioning the Future
Samir Alam decodes Blockchain technology and reviews its potential to revolutionise the apparel industry. Here is part one of the story.
Decoding Blockchain technology and its potential to revolutionise the apparel industry
In the last few decades, technology has been making rapid strides. However, the apparel industry hasn’t experienced any major technological overhaul that would change the very fabric of its functioning. But…imagine a world where a technological tool could allow for a easy and cheap tracking of a garment - from its material production stage to its final purchase. Think of a marketplace where consumers could just use their smart devices to check an item of apparel to know its entire life cycle – learn where different parts and processes of a garment were produced, cultivated, spun, woven, assembled and sold. The impact this kind of transparency and traceability could have would be immense, as it would help put sustainable production policies in action, and even play a major role in easing tariff and duty issues between nations. This technology would put power and choice in the hands of the customer, like never before. This technology is known as ‘blockchain’ and it is taking the world of commerce by storm.
The aforementioned advantages are only a small part of the potential that blockchain technology holds, when applied to fashion and apparel. As a phenomenon, this technology has already been part of massive debate and discussion in every industry from finance to farming, but very few people still have a clear idea on how it works and what it can be used for in the business world. This article will walk you through a brief history of blockchain, its workings, and how it may completely revolutionise the fashion and apparel trade.
THE CONTENT ISN’T THE POWER BEHIND BLOCKCHAIN, BUT THE MANNER IN WHICH THAT CONTENT IS STORED.
BREAKING DOWN BLOCKCHAIN
Most people may have heard of blockchain in relation to the controversial digital currency - Bitcoin. While Bitcoin is notorious for its volatile and dubious connections in the virtual world, blockchain is simply the technology that underlies the workings of Bitcoin. It has taken the world a few years to recognise that the digital currency that has attracted so much attention is just one of the many applications of Blockchain technology.
The best way to think of blockchain is to imagine a digital ledger that maintains a record of information. Now, imagine that instead of there being a single copy of this ledger it is multiplied across a network of interconnected computers. The records contained in this ledger could be any kind of information that you wish - from inventory tracking to scientific equations. The content isn’t the power behind blockchain, but the manner in which that content is stored.
In a business scenario, we can imagine that a manufacturer and a supplier are using a digital ledger to maintain records of the purchase of raw materials. Every time the supplier sends a specific shipment of raw materials to the manufacturer for money, this transaction is recorded in this digital ledger. Each transaction is then considered a block of information, or the block in the blockchain. Every time a transaction occurs, its details are recorded into a separate block, but each new block is linked back to a previous block, which in turn is linked back to the block before it, all the way until the very first transaction record. This creates a chain of blocks where the link between sequential blocks is secured using digital encryption, which then creates a blockchain. This blockchain record is created concurrently across a large number of devices on a network, so there isn’t just one copy. Now, this alone may not seem that impressive. But here is where the innovation happens.
BUILDING BLOCKS OF TRUST
Take, for example, a scenario in which one of the parties wishes to make a change in the record, without informing the other party. In that case they would need to not only ‘ hack’ or bypass the security encryption on the block with the
record they want to change, but would also be required to change all the blocks that come in the chain after it due to the way these ledgers are linked together. Think of each block having its own personal ID or ‘ hash’ which is derived using advanced mathematics based on the contents of the record. No two blocks can have an identical personal ID or hash, unless they are made under identical parameters. The personal ID of each block is a part of the information in the block after it. So, if anyone was to the change the information inside a block, it would automatically change the personal ID or hash of that block, and would then not match the information in the next block. The result of one block is a part of information in the block after it which would require every block after the changed block to also be ‘ hacked’ and changed.
And doing this to just one copy of the ledger wouldn’t be enough, since there would be numerous copies of the ledger distributed across the network. Any change made would have to be done across all the devices that exist on the network simultaneously, which is practically impossible in the case of distributed systems. This makes blockchain records tamperproof and practically hack-proof. To further ensure security - no single entity is in control of the blockchain and it is completely decentralised. This means the need to trust anyone else is no longer a part of decision making - trust is digital, provable and mathematically guaranteed. This is why the use of blockchain in a virtual currency like Bitcoin has been so successful, and despite its volatility, the security of the Bitcoin currency remains far more rigorous without any agency, government or company having to be responsible for it.
BLOCKCHAIN IN APPAREL AND RETAIL
So how does a data recording system which is super-secure help the fashion and apparel industry? Well, when we think of the apparel supply chain, the answer comes easily within our grasp. Blockchain ledger technology can consolidate all the links in the complex supply chain that runs apparel and fashion. By encompassing records from the very
FOR CONSUMERS, THIS FEATURE ENSURES THAT THEY CAN MAKE INFORMED DECISIONS ABOUT THEIR PURCHASES.
first stage of farming, to fibre production, to processing, manufacturing, shipping and retail, the industry can streamline information sharing between all the participants in the supply chain in a secure and highly trusted manner.
This would allow anyone in the system to access any information, such as the origin of a garment, in seconds rather than weeks. If there are concerns regarding the chemicals used in the treatment or production of the material, it can be easily checked without delay. Any information that the industry deems necessary to publicise its goods can now be verified by the consumer and compliance agencies without any uncertainty or delay. Not only does this increase efficiency, but it also allows for the smoother moving of goods under national policies of sustainability, materials sourcing, and other compliance related rules. Moreover, the customisation of the blockchain system can be designed to protect the business sensitive information of each commercial participant, while sharing the relevant compliance and public information.
For consumers, this feature ensures that they can make informed decisions about their purchases, be guaranteed that the quality and origin of the products is as advertised, and not just blindly accept the claims of the ‘Made in’ label alone. The impact of blockchain can also drastically reduce and potentially eliminate the existence of the USD 450 billion counterfeit clothing market which ails the apparel and fashion world. In terms of global trade, it can lead to trillions of dollars worth of trusted trade between nations, as efforts and debates over the sourcing of raw materials can be made public, easing up efforts to combat dumping practices. Not only will this reform the industry in a fundamental way, improving trade relations between international partners, but this technology can also make businesses more streamlined, efficient and profitable in their operations.