**6. Discussion of Research Results**

With blockchain fundamentals explained, how blockchain technology could impose security upgrades to existing product anti-counterfeiting and traceability systems, such as NAS, of supply chain industry, and the results gathered from security analyses performed on NAS, this section will cover the summary of vulnerabilities identified in existing product anti-counterfeiting and traceability systems. The opportunities of decentralizing anti-counterfeiting and traceability in supply chain industry and potential concerns on developing decentralized solutions for supply chain industry, are also identified.

### *6.1. Summary of Vulnerabilities on Centralized System Architecture*

Among NAS and other existing anti-counterfeiting alternatives with centralized architecture, utilizing wireless tag communication technologies, there could be at least three common probable counterfeit attacks applied to these anti-counterfeiting solutions. These attacks manipulating threats listed under the *physical NFC tag threats* and *system threats* according to the threat analyses performed are (1) modification of product records stored in tags, such as fabricating product identifiers or vintages of any product; (2) cloning of metadata stored in tags such as those genuine product records to any counterfeit product tag; and (3) removal of a legitimate tag from a genuine product and its reapplication to any other counterfeit products.

It has come to a point that even though the implementation of NAS itself is already more effective and secured than most of its typical supply chain anti-counterfeiting and traceability counterparts, with original product records being validated at any node along the supply chain, the centralized architecture of NAS could still pose risks in data integrity and product authenticity as any node, not only winemakers, along the supply chain have full control of product records stored in their own database architectures. In case different nodes along the supply chain are untrusting to each other, there could still be possibilities that a product record being duplicated adversely leading to a situation that product consumers could still purchase a product counterfeit at retail points, with fabricated wine records retrieved from NAS or its counterparts implemented in specific supply chain industries.

The typical architecture of centralized supply chains creates several concerns. First, there is a tremendous processing burden on servers, as significant numbers of products processed by multiple supply chain nodes. Second, substantial storage is required to store authentication records for every single processed product. Third, with centralized systems, traditional supply chains inherently have the problem of single-point failure and so potential service downtime and data loss could be expected. All in all, centralized product anti-counterfeiting and traceability systems, such as NAS, rely on a centralized authority to combat counterfeit products which would result in *single-point processing, storage, and failure* and those potential attacks via manipulating the security threats identified in threat analysis performed against NAS.

### *6.2. Opportunities of Decentralizing Supply Chain Anti-Counterfeiting and Traceability*

To better prevent risks and overcome threats with vulnerabilities initiated by centralized architecture, Blockchain Technology (or other Distributed Ledger Technologies built with decentralized networks) stands out as a potential framework to establish a modernized, decentralized, trustworthy, accountable, transparent, and secured supply chain innovation against counterfeiting attacks, compared with those developed on centralized architecture, with comparison between two as detailed in Figure 8.


**Figure 8.** Comparison of decentralized and centralized architecture.

Given a variety of advantages, such as prevention of single-point failure, better resilience, and availability of being applied among supply chain participants, introduced with the blockchain technology and concept of decentralized application, to have a more secured and sophisticated supply chain system against counterfeiting attacks, it has well proven that decentralized supply chain anti-counterfeiting and traceability are in demand. The decentralized solutions are worth developing and implementing in supply chain industry, starting with a new solution or developing a novel prototype with a decentralized architecture, based on legacy solutions, such as NAS, to reinforce the innovative idea of product anti-counterfeiting. There are also a variety of opportunities that autonomous and decentralized supply chain anti-counterfeiting and traceability solutions could bring to supply chain industry as explained in the following.

### 6.2.1. Improved Data Integrity of Supply Chain

With the advent of blockchain technology and other technologies such as distributed file storage, a multi-layered data storage and validation mechanism, involved with on-chain and off-chain data operations, on product records could be implemented in decentralized solutions of supply chain anti-counterfeiting and traceability.

The on-chain and off-chain storage and validation could then be in place to ensure data integrity and prevent the decentralized solutions from any attempted attacks. The attacks could be cloning attacks on NFC tags, modification attacks in case product identifiers and signatures stored in NFC tags are inconsistent with its counterparts stored in the backend databases or on-chain storage with deployed smart contracts, or reapplication attacks in case both read count and write count are inconsistent to its counterparts stored off-chain and on-chain respectively.

With the decentralization enabled by the blockchain network, data integrity of processed product records is further improved which could further coupled with a concept of digital-asset tokenization representing every single product processed on the decentralized solutions. Any state change on specific product record could only be initiated with

invoking methods on an open smart contract deployed to the network, with its transaction now needing to be validated with consensus reached, with other nodes held and run by different participating entities of supply chain industry, on the network. The immutability of transaction states related to any state transition of specific product record operations would mean that any state change processed on the network could be referred and queried based on individual transaction hashes and block numbers, which could further be confirmed on blockchain explorers connected to blockchain nodes running on the specific blockchain network.
