Entrupy aims to counter the counterfeiters with digital tech
08:51, 8 February 2022
Vidyuth Srinivasan started out studying journalism but now the CEO of tech firm Entrupy researches the art of fakery. He has clocked up hundreds of thousands of air miles, to places where counterfeiting is rife in order to understand how imitation goods are made.
What is the difference between an authentic Swiss watch, handmade in a workshop in Basel and high quality imitations churned out by factories in other parts of the world?
Entrupy CEO Vidyuth Srinivasan – Photo: EntrupyTo answer this question, Srinivasan and his team bought countless counterfeit objects, photographed them and used artificial intelligence to spot the minute details that separate the genuine products from their ersatz counterparts.
Studying counterfeits
“So we went all over the world, posing as wholesale buyers, and visited multiple different places where counterfeits are big. We studied counterfeits, we looked at what it takes for them to manufacture these kinds of goods across multiple categories.”
“We then trained computers to understand the minute differences between real and fake products. And after a while we realised that, ‘Hey, we have a set of algorithms that are accurate enough’. So we released it to the market,” he tells Capital.com on a video call from his New York home.
The first products launched were based on authenticating products like high value sneakers and bags, and Entrupy positioned itself as a certifying authority for secondhand goods, one which charges a flat fee instead of a cut of the product’s value.
“And we back this with a financial guarantee, meaning that if we get it wrong, about that item being authentic, then we will buy it off of you. So that’s the level of confidence we wanted to build in the market. And thankfully, it works.”
Digital fingerprints
The CEO says that Entrupy authenticates tens of thousands of goods every month, and that the numbers are constantly growing. The technology also enables the firm to identify individual examples of even mass produced products.
Take the classic Adidas Samba, a piece of footwear which achieved iconic status on English football terraces in the 1980s and which the German firm has sold 35 million pairs of since they were first sold in the 1950s.
Fake watches on sale in Bali – Photo: Shutterstock Srinivasan does not want to name individual brands but he says that even mass produced sneakers can be identified by his firm’s technology. Essentially every object has a digital fingerprint.
A 99% accuracy rate
“There’s anywhere between 500 to about 3000 different features on objects like trainers, such as shadow, the lining, there’s a material type itself and the expected amount wear over time.”
“There’s a shape to every single aspect of the item’s physical characteristics. And sometimes other features too”, he says.
The tech CEO says the firm has over a 99% accuracy rate in identifying physical objects with the majority of the errors being false negatives.
“Those algorithms are making a yes or no judgement, it’s not a confidence interval, it’s binary – is this real or not? And if it is real, we give you a certificate, and then the financial guarantee comes in.”
Brij(ing) the gap
But Srinivasan has even bigger ambitions for the firm. Today, the firm launched Entrupy Brij, a platform that enables anyone to mint an NFT of a physical object by taking a photo.
In simple terms this is an app based solution which creates an immutable and verifiable link between a physical item and its digital identity on the blockchain, using just a smartphone camera.
This NFT technology can then be applied to any physical goods and therefore provide a link between the real and digital worlds.
NFTS can be created with just a smartphone camera – Photo: ShutterstockWhile Entrupy charges for its authentication service its Brij offshoot is intended to morph into a decentralized finance (DeFi) protocol. Typically these earn returns linked to the transactions conducted on the protocol and that is the long-term aim for monetising the product.
A focus on high value products
But in the near term Srinivasan is focussed on expanding the potential use cases.
“The right universe for this to exist in at the time being is in the form of a protocol. Today, we’re launching our private beta. And we are already in conversations with brands, with communities, especially collectors, marketplaces and platforms.”
The initial focus will be on high value collectible goods, such as apparel, sneakers, watches, shoes, bags, collectible cards, sporting cards and wine.
“This is where we want to start because this is where we feel there’s a huge gap in the market. And there is latent demand for much more trust or trustworthiness across different platforms whether its exchanges or digital wallets.”
“We want to enable them with this technology, because while the concept of fingerprinting and using a digital token to identify an item already exists what has really changed is the ability to do that on any smartphone.”
Open to opportunities
While tokens are critical to Entrupy Brij, Srinivasan says the firm is not interested in tokenising, providing fractional ownership, high value objects. At least not directly.
“We don’t want to get involved in fractional ownership because we don’t want to be in a position where we touch products, we want to do everything virtually.”
“But we’re completely open to working with other partners in the ecosystem on a tokenised product, like art. We are not experts in this area but we could build the authentication technology for firms which are. We are keeping our eyes open for opportunities.”
