UATAG, a startup based in Lviv (Lvov) in Western Ukraine, has developed an effective and inexpensive solution to combat counterfeiting of products and works of art. The solution relies on a physical tag linked to a blockchain ledger.
The tag uses a piece of shattered glass, which is photographed and then added to a blockchain database. It can be accessed with a QR code later for verification purposes. Since the glass never shatters in the same way, each tag is unique, thus preventing anyone from recreating it.
In a 2016 market report, the global research firm Frontier Economics estimated that the worldwide economic value of counterfeiting and piracy could approach $2.3 trillion by 2022. UATAG hopes to bring a contribution to changing this forecast trend.
CEO Taras Rodtsevych founded the company in 2017. He had previously (2012) co-founded another Ukrainian company SvitStyle, an online e-commerce site for branded women’s clothing, shoes and accessories based in Lviv.
Taras came up with the idea for UATAG after his wife had purchased some expensive shoes for a wedding, which later turned out to be counterfeit.
There are various technologies available to combat counterfeiting including authentication packaging technology and track and trace packaging. UATAG offers a unique solution with two-level authentication that combines both physical and digital aspects. A special tag utilizing a shard of broken glass (glass was chosen because it never shatters the same way twice) is linked to a blockchain ledger and data records to easily identify original luxury goods.
The user scans a QR code to retrieve the UATAG image from a database to compare the viewed glass pattern with the physical tag. If they match, then the product is original.
Even though the product is not yet commercially available, it has won several awards, according to Rodtsevych. “In May 2018 we were selected as one of the hottest startups in Europe and were invited to attend The Next Web conference in Amsterdam.
And, we were a Techcrunch Top Pick at Disrupt San Francisco (Sept) 2018 in the category of Privacy/Security.” At the late September 2018 Lviv IT Arena startup competition, UATAG took second place in a matchup that initially began with 150 company applicants.
Rodtsevych claims each UATAG can cost 10 cents to produce and will be offered for sale at a price of 50 cents.
One of the markets Taras is pursuing is art. He has a trial in place with the National Museum of History of Ukraine. The UATAG anti-forgery solution will be used by the staff to identify the authenticity of museum objects when transported to other institutions, or used in temporary exhibits.
Rodtsevych is very upbeat about the startup climate in Ukraine and in particular in Lviv. “The startup climate is growing very rapidly and it’s expanding. The number of investors is growing constantly. And, we also have a couple of incubators and accelerators, which are working with startups. One of the most positive things about Ukraine is that we have a huge number of high quality specialists here who can resolve any level of technical difficulties.”
Even though, there are a lot of companies using the Blockchain technology for counterfeiting purposes, UATAG stands out because it uses a physical item (a tag) connected to the Blockchain database.
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