The fashion industry is still utilizing antiquated kind, business models. Tags and labels are barely standardized, supply chains are very complex and long and establishing intellectual property rights is somewhat very difficult.
Many have proposed that applying blockchain technology could aid in finding solution to many existing challenges in the industry. We intend to look at the many current issues the industry is facing, as well as where blockchains might be helpful and last a view into the various limitations.


A lot of people have naively seen blockchain as a cure-all, to existing business problems. This is somewhat away from the truth. Although, there are many very real-life applications within a fragmented industry like the fashion industry.


For many years, Blockchain has been debated for its application in the supply chain. Projects such as Waltonchain and Vechain have already demonstrated a very good use case. It’s a tendency to be operational within the fashion sector makes a lot of sense, given the fact that the industry is dominated by many complex and disoriented supply chains. Blockchain can aid lower this difficulty, increase transparency and ultimately reduce waste.
A major problem in the supply chain in the fashion industry is the lack of standardization between tags. This automatically makes tracking products a very difficult task. Also, another challenge is that there are many counterfeit products and difficulties in estimating the time of delivery.
One way to resolve this is to create a transaction on a blockchain every time an item moves from one point to another in the supply chain. This would aid to keep good audit and track of the product. Importantly, once a data is created in the blockchain it cannot be changed. This immutability provides high security against fraud between the different companies in the supply chain. It is an outstanding way to eliminate the need for trust issues between different companies. Although, it is not as easy as just start using a blockchain. There should be a provision for accurately checking a product also in real life. A good way to accomplish this is through radio frequency identification(RFID). Auditors frequently use this technology to physically verify a product while the blockchain stores the result.


Cost reduction is a lucid and an easy-to-implement use case for blockchain technology within the fashion industry. As a result of the global and complicated nature of the supply chains for many brands, reducing payment costs could really save the industry an ample amount of money annually. Since many of the raw materials for this, are made and processed in most of the developing nations in Africa, South America, and South-East Asia, payments can somewhat be very expensive.
Let’s assume fashion brands were to utilize cryptocurrencies for payment, they could significantly lead to reduced costs. What’s more, since payments are irreversible, it should aid in the reduction of fraud as well as payment cancellation. Also, there is the possibility of using smart contracts to effectively manage all payments. For instance, when the delivery of new product gets to the warehouse of a retailer from a factory, an oracle could easily communicate this event to a smart contract. The smart contract would then automatically execute the pre-arranged payment of a cryptocurrency to the factory owners. Smart contracts could also amply reduce the tedious amount of paperwork required between parties and as a result, there would be a recognizable reduction to unnecessary costs and increase inefficiencies. The result could lead to higher profits for the brands and suppliers and a possibly lower costs for consumers too, which is what we call a win-win situation today.


Records show that managing inventory is one of the most challenging for brands. The clothing stock is usually the biggest cost and asset a fashion company has to handle. Ensuring that inventory moves smoothly and quickly and also with the aim that there is always a good volume without carrying over-stock is vital for maintaining profitability in the industry. Commentators have suggested blockchains to be the solution to this.
This is yet, another less obvious advantage of blockchain within the fashion sector. Some people have proposed the storage of the number of units of stock on a blockchain as opposed to many existing databases. Additionally, it would be more easy and efficient to store hashes of this data on the chain. The aim is that sellers and suppliers could communicate efficiently about their stock levels with each other through a blockchain. However, this may rapidly increase efficiency and reduce costs if suppliers and sellers were to use the same blockchain, also, the same could be said for a shared database.
One of the sole aim of using a blockchain would be to ensure authentic immutability if the parties did not trust each other to provide accurate stock levels. Of course, the implementation of a blockchain like this between parties, would require utilization of a standardized stock keeping tag. Just like supply chain management, it is pertinent to use blockchain alongside a physical verification technology like RFID.


Consumers are currently very interested in the sourcing of the clothing they are purchasing, for both environmental and ethical reasons. News of unfavorable working conditions and poor environmental standards in developing nations can destroy a brand. A lot of brands spend ambiguous amounts of resources trying to convince customers that their products have high environmental and ethical standards. Hitherto, the actual verification of these claims has been very hard.
By implementing blockchain technology, the possibility for consumers to be confident in the claims that companies make can be assured. Companies can easily use it to show the location of where a product came from and ultimately the legit brand of a clothing item. On the other hand, consumers will be able to view and interact comfortably with every part of the supply chain of a product, whether that be the tailor who sewed the wool or the factory owner.
VeChain has been at the forefront of this battle. In 2017, VeChain came in partnership with the Babyghost label to use blockchain to help the brand share the story of it’s items to consumers. As popularly opposed to RFID, in this case, they used near-field communication (NFC) chips to physically verify items. This interpreted that consumers could verify the origin and possible journey of the item as well as access media of the item as it moves through the supply chain.
This was an outstanding real-life example of how blockchain, along with other technologies can effectively verify claims, increase transparency and benefit it’s consumers and brands. The immutability of a blockchain provides a degree of security and transparency that was in the past very much impossible to accomplish.


A lot designers often miss out on much of their intellectual property(IP) and royalties. The value of fashion most times rely on the originality of these individuals. But, they end up not receiving the share of profits that they deserve. It would be possible to attach intellectual property(IP) rights to the same documents that are stored with the inventory data and supply chain in a blockchain. All it would take is a timestamp and store a signed legal document applying to the intellectual property(IP) rights on the chain. Also, you can choose to store a hash of the document with a link showing the location of the whole file. This could protect creativity and increase their wages and ultimately depriving counterfeiters and cheats of profiting at their expense.
Also, as these items are sent out to distributors, and sales were made, by accurately tracking all this, designers could receive the royalties they solely deserve. Furthermore, smart contracts could activate these royalty payments and automate payments to the recipient without the many need for intermediaries and paperwork.


There are many countless exciting applications for blockchain within the fashion industry. Notwithstanding, this optimism should not get carried away, there are some major constraints.


One of the challenges with blockchain is that there is a major tradeoff between throughput and decentralization. So many blockchain proposals that we have obviously seen depends strongly on storing an enormous amount of data in the blockchain. This presents immutability and decentralization challenges. It might be to meet the data demands, that makes companies use federated blockchains as opposed to public ones. Sadly, this would apparently leave the door open to the potential for collusion between validators and block producers. And this could dangerously undermine the very security and immutability that the industry is aiming to achieve from the blockchain.


Blockchain is one method of storing and sharing digital information. The blockchain can in no way, for now, help the validity of the information. Any blockchain solution, whether be it inventory management or supply chain, depends on other technologies such as NFC chips or RFID and most importantly the goodwill of individuals to upload the correct information. None of the solutions illustrated so far, really solve the issue of malicious practice among individuals.

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