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LAS VEGAS -- The global supply chain has been poisoned with knockoffs and counterfeit goods, but IBM believes blockchain and crypto anchors -- digital fingerprints embedded into products and linked to the blockchain -- will provide the cure.
Speaking at IBM's Think conference Monday, several members of Big Blue's research team took the stage for a "Science Slam" to discuss five research projects they believe will change the world within five years. Two of the projects involved IBM Research's work on information security and featured blockchain and encryption technologies.
Andreas Kind, manager of industry platforms and blockchain at IBM Research, said it can be difficult to tell whether a Gucci handbag is the real thing or an expensive, well-disguised knockoff. Kind said the total value of counterfeit goods was recently estimated to be $1.8 trillion -- and the problem is getting worse.
"The root of the problem is actually that global supply chains have become very complex, with many participants across many regions of the world," Kind said. "Products have parts that are produced in one country, assembled in another and sold in a third country."
It's not just designer handbags, Kind said; counterfeit goods can include everything from brake pads to pharmaceuticals, possibly leading to injuries and even death. In addition, there have been several incidents of supply chain attacks and preinstalled malware in technology products.
Benefits of crypto anchors
Kind discussed the potential for blockchain databases and crypto anchors to authenticate products and distinguish real items from fake ones. The approach involves using blockchain's distributed ledger to create a tamper-proof record of authentic goods in the form of a provenance database.
But Kind said blockchain isn't enough. The technology has to reach into the physical world, he said. As a result, IBM is developing crypto anchors that can be embedded in physical goods and can authenticate them as the genuine article. Kind presented an example of an ink-dot code on a malaria test that doctors can scan and verify with their smartphones.
In addition to ink-dot codes, IBM also has tiny chips -- smaller than a grain of salt -- that can be embedded into physical products and authenticate those goods, as well as analyze and communicate relevant supply chain data. IBM said it expects the first crypto-anchor models to be available to enterprises within the next 18 months.
"In the next five years, crypto anchors will [cut in] half the number of counterfeit goods related to health and safety issues," Kind said.
Lattice cryptography is coming
Along with crypto anchors, IBM researchers discussed an encryption project at Big Blue: lattice-based cryptography. Arvind Krishna, director of IBM Research, said the coming wave of quantum computing will be powerful enough to crack modern encryption protocols.
"We know that hackers are always trying to break and steal stuff," Krishna said. "And someday, these attacks are going to get more sophisticated, as quantum computers come around."
Cecilia Boschini, a predoctoral researcher at IBM's Zurich Research Laboratory, discussed how the company is using lattice cryptography to create post-quantum encryption. Instead of using encryption algorithms that resist attacks using conventional computers, but that can be easily solved by quantum computers, lattice cryptography uses two-dimensional algebraic constructs known as lattices, which Boschini said are not easily defeated with quantum computing schemes.
Boschini said IBM submitted its lattice cryptography approach to NIST for standardization review as a quantum-resistant encryption protocol. "What we at IBM are doing is getting ourselves and our partners ready for a full upgrade of security infrastructures," she said, "and creating more advanced protocols that are as secure and as invisible to users as the present ones."