The Aura Blockchain Consortium recently announced Mercedes-Benz as its fifth founding member.

With the German car maker joining other brands, such as Cartier and Prada, we felt it was a fine time to learn more about Aura and its traceability solution. Sidewalk Hustle spoke with Daniela Ott, who leads the organization.

Aura is a nonprofit, technical provider, which is based on a private, permission-based blockchain by luxury brands for luxury brands. Unlike many traditional nonprofits, there is no membership fee, instead members subscribe to one of five software licensing packages. Ott and her team help educate businesses on how to “get in” with NFTs while growing a “shared learning” among a community.

“The technology runs on a zero-code solution, meaning I could teach you to write on the blockchain in literally a couple of hours,” Ott tells Sidewalk Hustle. No-code applications are not written using traditional programming languages, rather “drag and drop” interfaces, so non-programmers can utilize the technology without knowing how to program.

Ott spent 20 years in luxury, 15 of those working for Kering. She then wanted to be involved with “tech supporting sustainability” and finished a PhD which focused on “how you move exclusivity to inclusivity for luxury brands,” she says, adding that in order to achieve this inclusivity, brands need to “embrace the first-hand, second-hand, and third-hand customer.”

“Today, most luxury brands sell 100% physical new product, so revenue of cars, furniture, art, sales are typically 100% based on a new product and physical product,” says Ott. “I think over the next two to 10 years, depending on the category and how traditional a company is, this number will move to 80% or 90% of the revenue stream, with more revenue coming from a digital twin and the resale market.”

A digital twin refers to a digital replica of a physical product. This digital twin is manufactured as an non-fungible token (NFT). (See our Crypto Glossary for a breakdown of NFTs and other key terminology.)

Daniela Ott speaking on behalf of Aura Blockchain Consortium. May 2022.

“Every product, not just luxury, I think will have a digital twin because you will know where the product is coming from, where it was made, etc. It’s about traceability and trust. Was this watch actually made six months ago or three years ago?”

Ott says that at Aura, they validate the nodes every evening. (Nodes are computers that connect to the network and have an updated copy of the blockchain.)

“We know what data is put on the blockchain,” she says, adding that Aura provides its members with a proof of ownership, authenticity, as well as a digital warranty for their luxury goods. She argues that blockchain is immutable and therefore no one can ask a webmaster to change the information after it has been validated by each member of the Aura Blockchain Consortium.

To date, Ott says Aura has 17 million products on the blockchain, and they charge for every unit a brand adds on the blockchain.

“Blockchain itself is not a magic wand that verifies all the information from the supplier is correct; you, the brand, must make sure you have this relationship with the supplier. Then we make sure, as the technical provider, that this information is correct.”

Translation: Ott does not believe that blockchain cuts out the wholesaler or supplier. Authentication is done through a collective authority (aka a peer-to-peer network of validators who validate nodes).

“Aura is for all luxury categories, which includes jewellery, watches, art, fashion, cars, furniture, accessories, luxury hotels, musical instruments, and so on,” says Ott.