Brand value on the chain, Nike blockchain anti-counterfeiting patents can still play like this?

Recently, the world ’s top 500 company NIKE ’s blockchain sneaker “CryptoKick” patent was approved by the US Patent Office , and the company may also issue ERC 721 or ERC1155 tokens on the Ethereum public chain.

so what?

Can it solve the problem of Putian shoes?

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(Picture from: pexels.com)

This article will tell you, maybe it can! (Do n’t hurry to shoot bricks, but do n’t think it ’s too long to watch? You can skip directly to the fourth part of the article: stripping off property value, digital token will carry brand value )

I. Blockchain can solve the problem of replication in the digital world, but it cannot solve the problem of anti-counterfeiting in the real world

In the real world and the digital world, the problem of forgery and copying is very troublesome, and anti-counterfeiting technology has also been developed for many years.

After the birth of Bitcoin, the replication problem in the digital world was first solved, and the difficulty of tampering with the blockchain is a major nemesis of replicability.

Because of this, many people are trying to use the blockchain technology to solve the problem of counterfeiting in the real world.

However, the biggest problem with related projects is that it cannot ensure that real-world objects cannot be counterfeited, which leads to the tamper-resistant function of the information on the chain as a display.

The new Nike patent "CryptoKick", which has just been approved by the US Patent Office, seems to be doing the same.

If Nike can't solve this problem, isn't this patent meaningless?

After seeing the news, the author's first reaction was indeed this, but after careful understanding, I found that this was not the case.

Overview of Nike blockchain patents

Note: The following is translated from uspto.gov

This patent describes encrypted digital assets for footwear and apparel products, methods for providing and mixing such encrypted digital assets, and mining (Note: refers to pair breeding), mixing and exchanging blockchain digital shoes And clothing (with blockchain control logic) decentralized computing system.

More specifically, the currently described technology relies on the trust established by blockchain technology, enabling companies to control the creation, distribution, expression, and use of digital objects representing their brands. In addition, this technology enables companies to limit the overall supply of digital objects (or object characteristics) to create controlled scarcity when needed .

The digital objects envisaged by the present invention may represent:

1. Provide retail physical objects;
2. 2D or 3D design rendering or design files that may be suitable for future production;
3. Virtual representation of objects not currently intended for physical creation / production;
4. Or other similar objects;

When a consumer buys a pair of real shoes (we call them kicks), a digital representation of the shoe can be generated, which will be linked to the consumer and assigned a digital token, where the digital shoe and token are collectively represented as "CryptoKick ". This digital asset is protected by an encrypted block that contains hash pointers, related block links, transaction timestamps, and transaction data.

Using digital assets, buyers can safely trade or sell tangible shoes in reality, and trade or sell digital shoes, and store digital shoes in cryptocurrency wallets or other digital blockchain lockers .

(Free and easy commentary: writing here, we can understand that Nike's idea is to strip a part of the value of real assets, and then transfer it to new digital assets, in order to achieve digital asset security, rather than using the blockchain It is very important to do anti-counterfeiting of real assets.)

In some implementation examples, purchasing a real shoe may enable or "unlock" the corresponding digital asset and the digital shoe associated therewith. For example, when a person purchases a pair of real shoes from a registered seller, the unique physical shoe identification (ID) code of the shoe can be linked to the buyer ’s unique owner ID code, and at the same time, the The cryptocurrency wallet account issues an access prompt with a unique key so that the buyer can use the crypto token to receive digital shoes, including the key, token, and digital shoes will be assigned to the owner ID code.

In addition, the first ERC 721 or ERC 1155 token can be granted to authenticate and trade physical shoes, while the second ERC 721 or ERC 1155 token can be granted to access, cultivate and trade digital shoes.

(Free and easy comments: Nike may use a double token model, one of which corresponds to physical shoes, and the other corresponds to digital shoes)

In addition, after mixing or “cultivating” digital shoes with other digital shoes, you can also create “offspring of shoes” and customize a new pair of tangible shoes for the newly cultivated shoes offspring according to acceptable shoe manufacturing rules .

Digital assets can include the "genotype" information of digital shoes, including certain characteristics, attributes, colors, styles, backgrounds, etc., and can be coordinated according to the "reproduction rules" that control the mixing of two or more digital shoes combination.

Some optional features can also include:

1. Surrogacy function for breeding programs between two or more digital shoes;
2. Shoe / nanny functions provided by third-party entities that do not own digital shoes;
3. Animated features designed to make digital shoes look more realistic;
4. The “reproduction right” of digital shoes may be restricted by one or more real-world manufacturing restrictions. The ownership of each generation of digital shoes can be bound to the original physical shoes (for example, all or Part, genotype contribution, etc.).

Generate a cryptographic digital asset associated with footwear, including a digital shoe and a unique digital shoe ID code (key and password token), and then connect the cryptographic digital asset with a unique owner ID code through the middleware server computer, and The unique digital shoe identification code and the unique owner identification code for recording on the transaction block are transmitted to the distributed blockchain ledger (such as Bitcoin, Ethereum, Litecoin, etc.) through the middleware server computer.

The above summary only provides some concepts and features described in the Nike patent. For a detailed description, you need to view the original text:

Here are some of the more important and interesting contents of the patent illustration:

Figure 3: Schematic diagram of the functional structure of the entire system;

Figure 7: Functional description of obtaining cryptographic digital assets after purchasing physical shoe products;

Figure 11: Functional description of participating in a multi-user collaborative experience (such as a digital card collection game);

3. Why should we adopt ERC 721 or ERC 1155 standard?

Currently, most Ethereum token projects use the ERC 20 token standard, and the tokens of these projects are interchangeable and divisible. For assets with unique attributes such as shoes, the ERC 20 token standard Obviously not applicable, and the ERC-721 standard or ERC 1155 standard is a non-interchangeable token (or non-homogeneous token) standard, such as blockchain games such as CryptoKitties. standard.

(Picture from: Consensys)

And Nike's "CryptoKick" basically borrows the gameplay of CryptoKitties.

Fourth, the divestiture of property value, digital token will carry brand value

In the above patent summary section, we can see that Nike may issue Ethereum tokens in the future, and it uses a dual token model: one of the tokens corresponds to a physical shoe, while the other token corresponds to a digital shoe, and users can separate Trade them.

So what exactly does this mean?

Let's take a scenario example to illustrate:

Suppose Nike releases a new sneaker on a certain day in 2020, with a limited sale of 10,000 pairs, each pair priced at 2,000 yuan. Then users who purchase such genuine shoes can receive corresponding digital shoes and tokens based on vouchers such as activation codes after receiving physical shoes. Note that the value of physical shoes at this time is less than 2,000 yuan, and The value of the rest will be reflected in digital shoes and their corresponding tokens.

After that, users can freely trade physical shoes (there is not much demand in theory), they can also trade digital shoes freely, and even play "match breeding" games (guessing: it may not be a game of 1 + 1 = 3, But equal to 2 or less than 2), and for the digital shoes that are "bred", you can ask Nike to customize the corresponding physical shoes for you (note that physical shoes at this time will not be accompanied by a token). In addition, Nike also provides Digital shoes have designed some social games, and this can increase the brand's user engagement.

We can assume that the value of physical shoes will be close to the cost of Nike's production of it, and the value of Nike's brand will be completely transferred to digital shoes, which also means that counterfeiting physical shoes has basically lost meaning (because it has no profit space)!

This idea will be very disruptive, it makes good use of the difficult to tamper with the blockchain (this also explains why Nike does not choose the alliance chain or private chain).

Five, some other thoughts

This idea of ​​stripping asset value is useful for products with higher brand added value, such as luxury goods, diamonds, art, etc. For consumables like pork and chicken, which are not easy to keep, it is completely meaningless.

In addition, while this solution solves the problem of counterfeit products, it will also bring some new problems, such as regulatory issues, and also the problem of suppliers taking private digital tokens, and these problems will hinder its implementation. .

Reference: http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=1&f=G&l=50&co1=AND&d=PTXT&s1=Nike&s2= Crypto & OS = Nike + AND + Crypto & RS = Nike + AND + Crypto

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