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Blockchain based certification: End to Fraudulent Certificate Woes

  • mm
    by Rahul A R on Tue Dec 26

For as long as there’s been a transaction of any sort, there’s been a pertinent risk of fraud. This dates back to as far as 80 BC when the Romans implemented an anti-fraud law to curb fraudulent sales of property. While back then it was but an occasional offender who indulged in fraud, in the modern day and age, this has increased exponentially to a rather sinister scale. The 2016 Global Fraud Study by the Association of Certified Fraud Examiners revealed that on an average, a company loses around 5% of its revenue to fraud. This adds to a staggering loss of nearly US$ 3.7 trillion worldwide each year. In a constant effort to improve standards across various industries, certain mandatory certifications have been implemented. Ironically though, it is these very certifications that have led to a spurt in the incidence rate of fake certificates being reported across sectors. Apart from the unsurmountable monetary losses, this has led to some extremely serious threats to human safety, stemming from fake doctors to fraudulent structural safety certificates. Add to this the lack of effort by a shockingly large number of employers to verify the credentials of their employees during recruitment, due to the major logistics cost involved to carry out background checks, and we have a serious and ever-growing problem on our hands. Such has been the extent of this onslaught that the providers of these fake certificates now boldly brandish their ‘authentic fake certificates’ online, at just a measly fraction of the cost and effort of obtaining an original through the cumbersome right channels.

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Fake certifications: Not a sector that hasn’t been infected

Fake and falsified certifications have raised their ugly head across every fathomable sector, with some affected more than the others. Here’s a quick rundown of the major sectors affected by fake certifications.

Education

The most obvious and perhaps the biggest target of fraudsters is the education sector. One might think that a brilliant resume earned through years of hard work and endless sleepless nights, making it through college would most certainly help you stand out from the crowd. However, when you have websites such as straight to the point ‘phonydiploma.com’ offering you degree certificates at just about 5% of the actual course fee, there’s bound to be a large number of unscrupulous elements vying for that very same job with a degree in hand. Apart from the serious monetary losses involved, the University’s reputation is in serious jeopardy.

BSFI

Some of the most commonly reported fraud cases are in the financial sector, with insurance fraud being the most common of them all. The Federal Bureau of Investigation estimates that in the U.S. alone, insurance fraud leads to losses amounting to a whopping US$ 40 billion per year. The losses surmount many times the estimates when one considers non-health insurance frauds as well.

Retail and Manufacturing

Major companies take immense pride in their high-quality standards, duly certified by the International Standards Organization. This often acts as a key selling point for most manufacturers. However, in recent times, the fake copies of these otherwise highly valued certificates are available for a real throwaway price and there’s very little to differentiate between the real thing and the skilfully doctored certificate, even to a trained eye. In one such scam that was unearthed in November 2017, fake ISO certificates were being given away on payment of a mere INR 25,000 in the bylanes of Lucknow.

Food and Beverages

The food and beverages sector too hasn’t been spared, with cases of fake food and safety certificates surfacing every other day. The situation has been further aggravated by the increasing influx of adulterated food and low-quality Chinese products with ‘authentic’ food safety certification by the regulatory bodies. While governments of various countries have taken major efforts to crack down this nexus, given the wide availability of hard to discern fake certifications, this seems more like a case of trying to empty the ocean with a soup ladle.

Blockchain-certification: The incorruptible solution

In the past, issuing authorities and certification providers have tried to take on the menace of fake certificates by issuing certificates with advanced security features such as holograms, special seals, and security threads. However, advancements in technology have meant that fraudsters have gained access to methods to fool the system, often times with more than a little assistance from the insiders.

The dawn of blockchain technology may offer much-needed respite from this, promising to bury the devil of fake certification once and for all. Blockchain allows for an unalterable and incorruptible audit trail that is being leveraged not just for transactions but for certification as well. This technology brings in the most crucial element that of transparency in the entire certification program. The issuing authority issues the certificate and authenticates it with a private key. The certificate is then sent to the awardee, who can share it electronically with any party, who in turn can verify the authenticity of the certificate using a decentralized clearing number (DCN) and trace back the trail to the origin. Given the self-auditing nature of the network that stores this certificate, it is impossible for it to be tampered with, ruling out the possibility of any fake certificates being generated. The entire process is extremely efficient, 100% reliable and highly cost-effective.

  • Certificate is registered in a Blockchain network
  • Registered certificate is tamperproof
  • Anyone can verify the authenticity of the certificate using a private key value

One such blockchain-based certification solution called iCosys was developed by Accubits to EduTrust Consulting and Quality Assurance based in Singapore, which provides a tamperproof infrastructure that allows for the certifying authority to issue a digital certificate secured using encryption, on the public network. The Kenyan Government too, in December 2016, deployed IBM’s cloud-based blockchain network to enable educational institutes in the country issue digital academic certificates.

We are on the brink of a blockchain revolution that promises to restore the balance across all sectors, helping completely eradicate the menace of fake certification. We’ve only just skimmed the surface of this incredible technology and the near future is expected to usher in even more certified goodness

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Author

  • mm
    Rahul A R

Rahul A R is a technologist and full stack developer who specializes in Blockchain technologies and Cryptocurrencies. Though he’s worked within numerous privacy and security sectors, Rahul’s recent emphasis has been on solutions built on Ethereum, Tezos, smart contracts, and smart signatures, in particular, decentralized self-sovereign identity. He’s Helped clients, from start-ups to Fortune 500 companies, across North America and Asia, develop their blockchain strategy and build several decentralized applications using blockchains and smart contracts

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