To tackle the persistent problem of counterfeit hard drives, Seagate, a data storage firm will work with IBM and leverage its experience in the blockchain space as well as its technical expertise to develop a blockchain platform. This joint initiative will use blockchain and advanced security technology to facilitate the authentication of products. Blockchain technology is particularly suited for this use case with its immutable distributed ledger and traceability features, which prevents contradictions and can effectively serve as a means for tracking the provenance of products as they are distributed through the supply chain.
Counterfeit hard drives are no longer just black market items; they have transitioned into the mainstream supply and are now found on many e-commerce websites. The proliferation of fake hard drives has been an ongoing issue for Seagate; customers are not only in danger of purchasing counterfeit Seagate hard drives, but in some cases, they may even end up buying ordinary USB sticks masqueraded as hard drives. Aside from this, the issue of reverse supply chain could arise when customers return these defunct products to Seagate forcing the company to accept counterfeits into its own supply.
Based on data from the International Anti-Counterfeiting Coalition, global trade in counterfeit and pirated electronic products has attained a value greater than $1.7 trillion. This puts the forgery problem into perspective. There has to be a better way to ensure consumers protection and this is why Seagate has initiated its blockchain project.
Seagate Blockchain Solution
The Seagate blockchain solution is a product authentication system that capitalizes on IBM’s blockchain platform on the IBM cloud. This system will utilize Seagate Secure™ Electronic ID (eID) at the point of production. This approach will provide a unique identifier of every hard drive produced by Seagate. This identifier will function as an electronic “fingerprint” which can be used to verify the identity of the hard drive at any stage of its life cycle.
Seagate will also employ Certified Erase; a cryptographic erasure technology to help produce an electronically signed digital certificate of data purge. The device can sign its digital certificate thanks to a public key infrastructure (PKI) known as Seagate Secure. All the data collected is stored on the blockchain, complying with the new global data privacy laws.
According to Seagate, Certified Erase:
“Employs cryptographic erasure technology to produce a digital certificate of data purge, which is electronically signed by the device under the Seagate Secure public key infrastructure (PKI) and stored on the blockchain for compliance management with emerging global data privacy laws.”
In addition to these Seagate security layers, IBM will contribute the underlying distributed ledger framework behind its blockchain platform, Hyperledger. Hyperledger will allow network participants to add or edit data on the blockchain depending on their level of permission. Under this new authentication platform combined with its multilayered security protocols, manufacturers, technology vendors, service providers and even end users will all have access to an immutable ledger detailing the entire history of a product.
Aside from tracking and transparency, this system is also advantageous because it will help reduce product costs, increase the consumers’ confidence in the product quality and curb the issue of warrant costs associated with counterfeit products.
Speaking on this multifaceted solution, Global Managing Director of Electronics Industry at IBM, Bruce Anderson remarked that:
“The ability to […] combine blockchain with advanced cryptographic product identification technology […] signals blockchain’s potential to reimagine the electronics product lifecycle management processes. Counterfeit electronics components are a global issue that requires an ecosystem-wide effort to address.”
Seagate Gets On the Blockchain Train
IBM has established itself in the blockchain niche, working on many ventures ranging from food supply chain solutions to other enterprise-grade blockchain initiatives. However, this project with IBM will be Seagate’s first venture into this space. The company has worked with IBM since 2009, providing hard drives for the tech giant. Seagate started considering a blockchain-based solution for its hard drive counterfeit problem after a brainstorming session in June.
The traditional Seagate supply chain includes several intermediaries who have to manually scan and enter each computer part into their accounting software. This new blockchain solution could help move this process onto a single database, increasing speed, efficiency and significantly limiting the chance fraud.