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The solution to the $1 trillion fake parts problem is in the hands of cryptocurrency bros


Aviation passengers are at risk — the industry needs to move quickly to deploy the right technologies to keep supply chains secure

VIDEO: Crypto: The World’s Greatest Scam.
James Jani

October 27, 2023 / 03:55 PM IST

The $1 trillion aerospace parts industry has a simple solution to the problem of bogus components threatening flight safety: the technology that underpins cryptocurrencies such as Bitcoin. The challenge now is to get the powerful victims of those fake components, including the global aviation industry and US Department of Defense, to move on it.

Forged paperwork was at the heart of a scandal outlined by Bloomberg News in September, where second-hand and knock-off nuts, bolts and turbine blades were sold for installation in jet engines made by Safran SA and General Electric Co. The discovery sent the industry rushing to identify more bogus parts, but the process is cumbersome and manual. This recent event is similar to a series of cases uncovered by a US Senate committee
more than a decade ago that found numerous instances of fake chips being put into military aircraft.

Blockchain technology could have prevented much of these scams, allowing a warehouse worker with a smartphone camera to instantly authenticate mundane pieces of hardware. The process consists of two phases. First is to validate an item, and then to track where it’s been.

By taking a photo of a piece — from a miniature screw to an engine cowling — startups such as Bellevue, Washington-based Alitheon Inc can tell staff whether it’s on a list of genuine items. The system goes beyond basic image recognition, and is more akin to taking a human fingerprint.

Whereas a person can be identified from as few as 12 points on a finger, Alitheon’s FeaturePrint service can map and save 5,000 points from a picture. This allows an item to be matched even it has been damaged, defaced or worn. Such redundancy is crucial because maintenance personnel need to track used parts as well as new. Rather than store the entire photo, companies can summarise key information and store it as metadata with a serial number for that specific item.

Blockchains are the next crucial step. All digital files, from music to text documents, are simply a series of binary bits. That means they can be put through a one-way mathematical algorithm called hashing. We can use this to check whether a new item matches the hashed item, but we cannot take the hash and reverse engineer it to decrypt the original. Unlike paper documents or centralised databases, information stored as a hash cannot be tampered with.

A blockchain takes this further — we can take the hash of the item, add details such as the owner, signatory, date and location, and hash it again to form a digital block of data that cannot be forged. Every subsequent change in status can be added to the prior block, get hashed again, and added to the chain. Any attempt to fake the data will show up as invalid when referenced against the blockchain.

Using blockchains alongside authentication technologies can allow everyone in the production process to track the chain of custody. Beyond identifying fakes, this approach allows maintenance engineers to quickly assess how old a part is and schedule its replacement.

Bitcoin, as the world's leading cryptocurrency, is the most famous blockchain. Yet there's far more useful and valuable ways to deploy the technology. Non-currency applications offer far more possibilities.
Alitheon’s technology is already in use authenticating collectible sneakers, gold bullion and parts of the aerospace, automotive and medical sectors, with some clients extending the platform to blockchains to track provenance.

There are numerous other examples. Singapore-based DiMuto Pte Ltd has deployed blockchains to track shipments of fruit including durian and avocado from warehouse to supermarket. Apple Inc is among companies deploying blockchain to trace gold from its origin to refiners in the iPhone maker’s supply chain.

Aviation is among the largest potential markets and one where the consequences of fake components can be fatal. Increasing demand for aircraft, in both commercial and military operations, will drive the aviation parts market to $1.3 trillion in revenue by 2030, according to researcher Fact.MR. There’s no time to waste. The aerospace sector needs to move quickly to deploy the technologies needed to keep the supply chain safe. Regulators must lean on them to make it happen before it’s too late.

Tim Culpan is a Bloomberg Opinion columnist covering technology in Asia. Views are personal and do not represent the stand of this publication.

Credit: Bloomberg 

Tim Culpan is a technology columnist for Bloomberg Opinion. Based in Taipei, he writes about Asian and global businesses and trends. Views are personal, and do not represent the stand of this publication

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