Blockchain Technology and Its Application in Fashion Industry

This article is written by Nilargha Saha

What is Blockchain technology?

Blockchain technology is a series of records and data known as blocks which are linked to each other in a cryptic manner for security and safety purpose. Each cryptic code contains a mathematical algorithm (that maps out data to a fixed size), a timestamp which is nothing effective time tracking data and transaction data.

Blockchain technology was first introduced by a Japanese man named Satoshi Nakamoto in 2008. Later he improved the design of blockchain by incorporating timestamp blocks. A blockchain database can be managed in an autonomous manner through a peer-to-peer network, decentralized, and well-distributed connectivity. It maintains transparency all over the supply chain and facilitates a robust workflow.

Structure of Blockchain

Image: Blockchain structure

Blocks: Blocks are track record of successful transactions which are sequentially arranged in a cryptographic tree known as Merkle tree. Each block contains its respective information, which is linked together in an iterative way with the previous one.

Block time: It is the average time taken by the blockchain network to generate one extra block in its own blockchain. On average, five to six seconds are taken by a blockchain network to create a new block. Shorter the block time, faster is the duration of transactions.

Hard forks: A hard fork is a rule when the software validates according to the old rules, it will check the produced blocks according to the new rules as invalid. In case of a hard fork, all nodes meant to work in accordance with the new rules need to upgrade their software.

Decentralized system: Blockchain automatically eliminates the risk of the data which were being held centrally through peer-to-peer network system. This type of network hardly allows computer crackers to exploit the system. Value tokens sent across the network are recorded as belonging to that address. A private similar to a password is assigned here for better security.

Privacy: Privacy in blockchain can be categorized into two sections such as opened and permission (private).

Open blockchains:

Open blockchains are more user-friendly than some traditional ownership records, which, while open to the public, still require physical access to view. These blockchains serve as a distributed version of multi-version concurrency control (MVCC) in databases. For example, making a transfer between two bank accounts if a reader reads the balance at the bank when the money has been withdrawn from the original account and before it has deposited in the destination account, it would seem that money has disappeared from the bank.


Permissioned blockchains use an access control system to govern whoever has access to the network. validators on private blockchain networks are verified by the network owner.

Fields of blockchain application:

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Types of blockchain:

  • Public Blockchain: It has absolutely no access restrictions. Anyone with an Internet connection can send transactions. Bitcoin is one of the biggest public Blockchain
  • Private Blockchain: A private blockchain is a permission. One cannot join it unless invited by the network authority.
  • Hybrid Blockchain: It consists of both centralised and decentralised blockchain
  • Sidechain: A sidechain runs in parallel to a primary blockchain. It allows the sidechain to operate independently of the primary blockchain. It operates by means of an alternate way of record keeping and alternate algorithm

Benefits of Blockchain:

  • Keeps the complete track record of activities and history of database in a sequential manner
  • Secured system as there is no centralised database where a hacker can make an entry.
  • No need for central administrator
  • Prevents counterfeiting
  • Transparent throughout a supply chain

Software companies promoting blockchain in the fashion world

Brands like Adidas, H&M Group, Patagonia, Gap, Everlane and LVMH nowadays are coming forward with blockchain technology in their supply chain as well as in retail to prevent counterfeiting, to maintain transparency in their business and for that they are collaborating with software companies such as Provenance, Faizod, Lukso and Ve-chain.

Provenance: Provenance, a blockchain software company is doing a consultancy job with fashion brands to get a grip on their raw materials through blockchain and a smart labelling system. Brands can track raw materials at every step of their supply chain.

Faizod: Faizod is another software company. They’ve created global Supply Chain linked with blockchain technology to create a series of chains; finance, manufacturing, sub-contractors and also ensures complete transparency over the manufacturing of products. It allows real-time tracking, identify bottle-necks and improvises transactions in cargo deliveries from Asian countries to European countries and America.

Lukso: Lukso is a blockchain platform leading to a larger network, and greater issues of trust in that network. Built on Ethereum system, the software system is an open-source allowing brands to develop, improve the community, and free access to the network.

VeChain: Counterfeit goods in fashion is matter of concern in recent day fashion world due to jeopardise sales and dilute brand reputations. Vechain comes up with NFC technology where each products has its own unique Id. Chinese fashion brand Baby-ghost made a collaboration with VeChain to prevent these counterfeiting 

Fashion Brands those incorporating blockchain:

Created in San Francisco in 2011 by Michael Preysman. Everlane is a renowned brand that is based most of all on its transparency. Top authority of the brand find out some shadow areas in the production line, particularly in the vendor factories it deals with. some manufacturers were accused of not respecting the labour law in vigour in their country. After sorting out these problems they have decided to incorporate blockchain technology to maintain their transparency as well as to keep up their position in the eyes of their consumers.

AURA a blockchain network is enabling consumers to trace the history and authenticity of luxury goods developed in LVMH. Aura is doing this blockchain network in partnership with LVMH and Microsoft. Louis Vuitton has taken this step as their brand handbags are reporting to be fake to some consumers. Louis Vuitton has also channelizes this technology to their manufacturers and distribution centre. Counterfeit has reduced after applying this technology.

Arket a subsidiary of H&M is also using blockchain technology to improve the traceability of products along with VeChain. Here VeChain focused on the development of supply chain solutions; it utilizes distributed ledger technology to provide its customers with a system consisting of determining the authenticity, quality of the product.

Patagonia, Inc. is an American clothing company that markets and sells outdoor clothing. The company was founded by Yvon Chouinard in 1973. To prevent counterfeit and fraudulent behaviour in the manufacturing line it has also come with up blockchain technology.

Market trend: 

The market trend of the blockchain is shown in the following chart. 


About the Author:

Nilargha is a technology enthusiast with creative spirit in the field of fashion. He loves to compose contemporary content in the arena of fashion, clothing, technology, and textile in literary approach. A textile technology graduate and perusing his masters in fashion technology from NIFT Delhi.

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