Practical use cases of NFTs in supply chain

We have already seen how non-fungible tokens are transforming the art space. NFTs have created a way to represent value and store it on an immutable network — the blockchain. As art moves on chain, its provenance and ownership become memorialized through permanently recorded transactions on a public network.

As more innovative use cases of digital art evolve, it has not taken long for other industries and sectors to discover how NFTs could be put to good use to enhance ownership and authentication. We have already seen how the real estate industry uses NFTs to create liquidity through fractional ownership, while also representing properties and ownership on the blockchain through digital art.

Let’s now take a look at how the supply chain industry could deploy NFTs for product authentication and validity.

NFT Supply Chain

The inherent characteristics of NFTs

Before delving into how NFTs could be deployed in the supply chain, it is important that you know how the inherent characteristics of these digital assets have made them valuable for the entire process.

Below are some of the unique characteristics of NFTs:

  • NFTs are digital assets that can represent physical assets.
  • They are unique and cannot be replaced with another — a nod to their non-fungible status.
  • NFTs are immutable assets that are permanently stored on the blockchain. 
  • By leveraging blockchain, NFT transactions are transparent and can be viewed with the help of blockchain explorers like Etherscan.

NFTs in the supply chain

Issues of authenticity and standards have been endemic in the supply chain space for a long time. As is commonplace, a product typically goes through different phases in the supply chain before getting to the final consumer. You’ll typically find that the constituent parts of a supply chain include the product manufacturer, the wholesaler or distributor, the retailer and the consumer.

Because of the long chain of supply, it is almost impossible for a manufacturer to oversee the movement of products and commodities from the production point up until the stage where they get to the final consumer. 

As a result, the supply chain — literally an assembly line in some cases — remains vulnerable to tampering or to fake products being introduced into the mix. This in turn create a level of dissatisfaction when a product gets to the final consumers, sometimes to the point where recalls are required.

Through NFTs, manufacturers could easily create digital replicas of their products. These replicas are then attached to individual products through smart labels (be they QR scans or unique codes) that can easily be used to track the authenticity of a product on the blockchain. The status of the product is updated at each point in the supply chain, thus creating a permanent record of transactions from the point of manufacture to the point of consumption.

Advantages of NFTs in the supply chain

Product authenticity sits at the heart of a strong manufacturer-consumer bond. When this is established, it could help create brand loyalty from consumers toward a brand. As a result, the brand is much more likely to increase sales.

For consumers, the ability to verify the authenticity of a product creates a level of trust and satisfaction. The consumer feels that they’re getting the value they deserve and that their money is well spent.


The evolution of NFTs is showing how they are shifting from a mere Internet phenomenon to finding relevance and use cases in the real world. Having procured a solution to one of the most important sectors in global trade, it is only a matter of time before other industries start to deploy their innovative use cases.

Want to learn more? Contact the Amberfi business department for info on how brands can make use of NFTs and the blockchain.

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