Emerging technologies such as Blockchain and Big data analytics tools are changing the landscape of brand protection. Could they provide a valuable solution? What impact could this have on the tax stamp industry?

1. WHAT IMPACT COULD BLOCKCHAIN, RFID AND
BIG DATA HAVE ON TAX STAMPS?
2018 Tax Stamp Forum​
Nairobi, Kenya​

2. SVEN BERGMANN
MANAGING PARTNER

3. Underestimating Technology Disruptions
"I think there is a world market for
maybe five computers." ​
1943
Thomas J. Watkins
Chairman

4. Underestimating Technology Disruptions
"Neither Redbox or
Netflix are even on the
radar in terms of
competition."​​
2003
Jim Keyes, CEO

5. Underestimating Technology Disruptions
“The biggest risk is not
taking a risk
2004
Mark Zuckerberg

6. The Limitations of Technology
Tax verification, Tax stamp
authentication, Track & Trace /
Anti-Diversion
TaxRate
12345678
Encrypted
Codes
Serial Number
Overt Security and
Design Features
Security Features
(overt & covert)
Product authentication
Product Overt & Covert
Security Features

7. The Limitations of Technology
Unproven at industrial scale
Packaging
AccuracyCosts
Implementation
Privacy

8. Considerations on RFID
• The technology was established as an inventory and
distribution optimization technology – not illicit
trade
• Does your business issue apply to the technology?
• Does the product price and margin support the
higher cost?
• Can RFID be applied to the product packaging?
• Does the product have unique issues which limit
effectiveness?

9. Fundamentals
Identifier (Number or Alpha) unique
amongst all identifiers used for objects
for this specific purpose:
• Serial Numbers
• Random Numbers
• Allocated codes from central registry
UNIQUE ID (UID)
Process of determining the current
and past locations (and other
information) of a unique item or
property.
TRACK AND TRACE
Harvesting or analyzing very large
sets of unstructured, sometimes
unconnected and unrelated data
sets to detect patterns,
relationships, gain insights and
predict outcomes and behaviors.
BIG DATA
Tamper-proof continuous transaction
records, called blocks, which are linked,
encrypted and recorded on a
decentralized, distributed and public
digital ledger, across many computers
so that the record cannot be tampered
with or altered retroactively
BLOCKCHAIN
Tamper-proof continuous transaction
records, called blocks, which are linked,
encrypted and recorded on a
decentralized, distributed and public
digital ledger, across many computers
so that the record cannot be tampered
with or altered retroactively
BLOCKCHAIN

10. Current programmes
Private Database
Unique ID

11. The Impact of Big Data
“Blind Spots”
Private Database
Public Database
Public Database

12. Best Practices on Big Data
• Inventory all existing government data sources
• Inventory other private databases, which might be
available to analyze and develop patterns
• Aggregate available government and public databases
before looking at additional databases
• Expand / integrate existing programs vs. starting new
• Clearly define the issue / question asked

13. Ledger seals all information
What Blockchain could do

14. Ledger information
What Blockchain could do

15. Blockchain Simplified
CENTRALIZED DECENTRALIZED DISTRIBUTED
CENTRAL BANKS PHARMA
TRACK AND TRACE
BLOCKCHAIN

17. Object from B
 A
A
B
CD
E
Centralized
System
The Disruption Potential

18. A
B
CD
E 123
B  A
Item 123
B  A
Item 123
B  A
Item 123
B  A
Item 123
B  A
Item 123
Item 123
at A
Item 123
at A
Item 123
at A
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at A
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at A
A  D
Item 123
Item 123
at D
A  D
Item 123
A  D
Item 123
A  D
Item 123
A  D
Item 123
Item 123
at D
Item 123
at D
Item 123
at D
Item 123
at D
B  A
Item 123
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at A
A  D
Item 123
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at D
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at A
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at D
B  A
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at A
A  D
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at D
Blockchain
System
The Disruption Potential

19. 123
A
B
CD
E
123
B  A
Item 123
B  A
Item 123
B  A
Item 123
B  A
Item 123
Item 123
at A
Item 123
at A
Item 123
at A
Item 123
at A
A  D
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Item 123
at D
A  D
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A  D
Item 123
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at D
Item 123
at D
B  A
Item 123
Item 123
at A
A  D
Item 123
Item 123
at D
Item 123
at D
Counterfeits or
Illicit Whites
The Disruption Potential

20. A
B
CD
E
123
B  A
Item 123
B  A
Item 123
B  A
Item 123
B  A
Item 123
Item 123
at A
Item 123
at A
Item 123
at A
Item 123
at A
A  D
Item 123
Item 123
at D
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at D
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at D
B  A
Item 123
Item 123
at A
A  D
Item 123
Item 123
at D
Item 123
at D
Blockchain’s Impact on Illicit Trade
Diversion /
Smuggling

21. Impact of technology
Tax Stamp Forum - 9/14/14 21
Counterfeit /
Unauthorized
Production
Genuine
Production
Authorized
Retailer
Unauthorized
Distribution
Legal
Distribution
Unauthorized
Reseller
End
User
Legend:
Genuine
Product / Legal
Distribution
Genuine Product
/ Grey /
Smuggled
Illegal Product
SPHERE OF INFLUENCE FOR
TECHNOLOGY

22. Blockchain Strengths/Weaknesses
Strengths
• Public ledger creates “chain of
custody”
• Ledger cannot be tampered
• No central authority
• Significantly strengthens UIDs
Weaknesses
• Requires motivated entities
• Like other technologies does not
impact illicit trade outside
regulated channels
• Technology infrastructure required

23. Implications for the Industry
• Provides significant security to sophisticated
Departments of Revenue with motivated third
parties
• Can be added to existing stamps to add a layer of
authentication and tracking
• Significantly enhances security of UIDs
• Potentially reduces the need for costly overt and
covert security features

24. Blockchain Today

25. “We always overestimate the change
that will occur in the next two years
and underestimate the change that
will occur in the next ten.
Don’t let yourself be lulled into
inaction.”
1996
Bill Gates,
The Road Ahead

26. SVEN BERGMANN
SBERGMANN@VENTUREGLOBALCO.COM