The integration of blockchain technology in tracing origins helps enhance the value of not just physical products but also those with cultural and artistic significance,… However, not every product or industry should adopt blockchain due to operational costs and implementation procedures.
Applying blockchain technology to identify or trace the origins of high-value products, both material and spiritual, is considered a step toward better protection for collectors or users within a risky market.
However, in many cases, the application of blockchain in the identification or tracing of origins is used as a publicity tool to inflate the value of the original product without transparency.
The application of blockchain in tracing the origins of cultural and artistic products:
The narrative surrounding the origin tracing of handicrafts and unique high-value products sparked lively discussions among experts and speakers at the seminar “Application of Blockchain in Tracing Origins: NFC, NFT, and NFCT” during the “Promoting Innovation and Risk Management in Blockchain Applications” seminar organized by the Blockchain Association.
This activity was part of the International Innovation Exhibition (VIIE) 2023, led by the Ministry of Planning and Investment at the National Innovation Center (NIC) in Hoa Lac, Hanoi, aiming to introduce over 40,000 local and international visitors to Vietnam’s technological applications and promote innovation.
Drawing from experience in numerous traditional cultural preservation and application projects, Mr. Dinh Duc Hoang, Deputy Director-General of the UNESCO Information Center, provided a specific example involving pottery products from Phu Lang village, Bac Ninh. Here, artisans hand-mold and carve thousands of pots, then fire them using a no longer prevalent wood-burning method, resulting in random colors and patterns. This uniqueness forms the product’s distinctiveness and commercial value.
According to the Deputy Director-General of the UNESCO Information Center, modern data tracing technology is necessary to identify products like Phu Lang pottery. This serves not only to increase economic value but also to narrate cultural stories and promote the village’s craft brand.
Regarding the business’s solutions, Mr. Le Quy Luong, CTO of AlphaTrue Joint Stock Company, mentioned that artisans and craft villages can elevate the brand value of their products by pre-ordering a certain quantity of pottery and tokenizing them on the blockchain before the actual product is made. Buyers can continuously monitor their pre-ordered products during the production process, gaining deeper insights into the product’s story. If a famous person purchases one of these pots, it will be notably different from the others, and the corresponding token will have higher value.
Mr. Luong referred to this solution as NFCT, a combination of NFC (Near-Field Communications – Short-range wireless technology) and NFT (Unique blockchain-based tokens).
How to manage risks in applying blockchain?
Experts participating in the discussions collectively agreed that while applying blockchain for tracing specific, culturally valuable products has numerous benefits, it also comes with disadvantages and risks that businesses need to assess beforehand.
Sharing this view, Mr. Tran Dinh Ngoc, CEO of Onyx Vietnam Company, highlighted, “High costs pose a barrier since unique products demand different tracing methods compared to mass-produced consumer items, requiring additional tools and human resources to operate the system.”
Modern origin tracing processes require a combination of technologies focused on three main elements: data-carrying objects, data storage centers, and data reading devices. However, there’s still the risk of forgery for data-carrying objects (tags, barcodes, QR codes, magnetic cards, etc.).
Mr. Nguyen The Tiep, Deputy Head of the Institute for Anti-Counterfeit and Anti-Smuggling Technologies, Anti-Counterfeit Fund (AFC), stated that blockchain features the characteristic of unmodifiable written information. However, users need measures to control the information input into the blockchain since incorrect information on the blockchain cannot be altered like on normal systems.
Particularly, with years of experience in journalism and media, Mr. Dinh Duc Hoang emphasized that companies and manufacturers must avoid misusing blockchain technology’s publicity in applications lacking value, as seen in some recent cases.
As a societal organization, the Vietnam Blockchain Association has engaged in connectivity activities to promote the digital transformation of the cultural and artistic sector through researching blockchain technology applications. In 2022, the Vietnam Blockchain Association collaborated with TechArt Technology Village at the “Preservation and Development of the Cultural and Art Industry” seminar within Techfest 2022 in Binh Duong.