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Defending Manufacturers, Distributors, Retailers, And Consumers Against Counterfeits

Whitepaperwww.bonafi.ioA blockchain Digital Label (US Patent Pending)

White Paperwww.bonafi.io1

Executive SummaryBonafi is on a mission to defend all brands, big and small, and to protect consumers from counterfeits by implementing a fail-safe authentication system using blockchain technology. The central questions it answers are:

“Who is the manufacturer?” “Who is authorized to sell it?” “When was it produced?” “When did it arrive at this store?”“Is it the real thing?”

Bonafi integrates four major components to fight the counterfeit industry (U.S. Patent Pending).

1. Blockchain technology2. Crypto-Tag™ - a crypto-enabled NFC tag,3. BONA Tokens4. Mobile Application

The Company’s BONA tokens are used for charging the mobile Application and they allow users (retailers & consumers, and third-party sellers) to scan the Crypto-Tag™ to determine the authenticity of goods.

ProblemThe impact counterfeit goods have on the fashion, and pharmaceutical industry is estimated to be $700 billion/year. This does not include collateral damage caused by counterfeit goods: legal battles between brands and consumers, additional cost to repair or replace counterfeit goods, medical problems caused by inferior materials used in counterfeit goods, and even death.

SolutionBonafi’s authentication system, built on the blockchain, will verify genuine goods throughout the supply chain from the manufacturer, to the retailer, and to the consumers using mobile Applications powered by BONA tokens.


How It WorksOur digital label, Crypto-Tag™, is affixed to a product and used as the engine that will deliver relevant data to the end-user, verifying a product’s authenticity. Information, such as the original manufacturer, when it was produced, where it was produced, when it arrived at an authorized reseller’s store, and even the current or past registered owners (with their permission, of course), will be used to verify the authenticity of a product using a mobile Application compatible with all iOS, Android, and Window devices.

Shown in Figure 1 is a network of blocks conceptually interconnected on a blockchain. Each product’s information would form a block of information, beginning with the initial block created by the original manufacturer and recorded on the Crypto-Tag™. Transactional data will be recorded on the blockchain as it moves through the supply chain, building a unique “fingerprint” for each product connected by unique Hash functions, as shown in Figure 2. Each block will be created by the Crypto-Tag™ and mobile App and authenticated with the combination of Public and Private Keys created at the beginning of the supply chain.

Figure 1 Blockchain Digital Label Network

Figure 2 Blockchain Formation, (n=1)

Tag_(n-1)Data_0: 0x34..Hash_0(Data_0, 0)

Tag_nData_1: 0xFE..Hash_1(Data_1;Hash_0)

Tag_(n+1)Data_2: 0x4E..Hash_2(Data_2,Hash_1)

Your Favorite Store


How It Works ContinuedThe Crypto-Tag™ is equipped with Near Field Communications (NFC), flash memory storage, and public key cryptographic engine that will serve to send data to and from the blockchain and the mobile App. Also, the flash storage allows manufacturer’s data to be stored securely on the Crypto-Tag™, i.e., the manufacturer’s ID, Cryptographic digital signatures, and other pertinent data from the manufacturer.

Once a product leaves the manufacturer, the relevant data will be recorded on the blockchain, encrypted by a unique Private Key. Each Crypto-Tag™ on a product will store the original manufacturer’s information, encrypted with the Public Key.

As shown in Figure 3, the product with the tag leaves the manufacturer and is scanned at each point of the supply chain, such as the departure from the manufacturer, the port of export/import, and authorized reseller’s store. Each time the Crypto-Tag™ is scanned, necessary information will create a new block on the blockchain and will also be stored on the tag.

Thus, when a consumer scans a product with the Crypto-Tag™ for authenticity, the mobile App will cross-reference the data on the tag and the blockchain verifying if the product is genuine. The Crypto-Tag™ plays a central role in the authenticity solution provided by the Company. And the consumer would use the Company’s BONA tokens to enable the App and authenticate the goods.

Functionally, a Crypto-Tag™ is similar to the NFC chip, such as that shown in Figure 4. The digital tag is versatile and can be made water-proof. It is scanned by Near-Field Communications (NFC) mechanism built into mobile devices. Upon placing the phone near the Crypto-Tag™, the App will pop up, while wirelessly powering the tag, communicating with the device, performing the necessary Hash functions, executing the public cryptographic routines, and reporting its authenticity.

Figure 3 Blockchain Formation through the Supply Chain

Figure 4 Crypto-Tag™ — NFC Based Cryptographic Digital Label


Possible counterfeit attack cases of the tag:

1. Copy The Tag:This is simply not feasible. The Crypto-Tag™ is implemented with a microcontroller, a Public Key cryptographic engine, and an NFC. The Public Key system is unbreakable, for all practical purposes. The company is looking to design various types of Crypto-Tag™ so that it would be readily integrated into a logo, a paper label, a plastic wrapper, or inside the plastics of the product.

2. Forced Detachment or Removal of the Tag:It is designed such that, if the Crypto-Tag™ is detached or removed from the product, it would be destroyed in the process. This destruction would render the tag useless and be an indication that it has been tampered with.

BONA Tokens

The BONA token is the currency that will be used to power the App. The end-user, who will be using the App to verify the authenticity of a product, will use BONA tokens to pay for the validation. If the product scanned is not authentic, the user will not be charged, or BONA token will be refunded. Also, if a consumer adds to the blockchain by adding the owner’s registration data using a proper verification system, the consumer will also be rewarded with BONA tokens.

The cost and reward of authentication will vary and be determined by an algorithm that measures the retail price, demand, total number of scans, and various factors about the product. For example, a pair of Air Jordan’s might cost 0.1 BONA tokens to authenticate, while a Birkin Bag will cost 1.5 BONA tokens to authenticate.

Figure 5

BONA Tokens Continued

BONA tokens can be purchased directly from the Company through the mobile App or on a national coin exchange (in the future upon which time it is guided by the factors, such as favorable market conditions, governmental regulations, and the company). The purchase of tokens via the App may be priced higher than the price on the exchange due to the added convenience. At the company’s sole discretion, the App may contain an initial free trial of BONA tokens on the first download of the App and on upon successful user registration.

The App

The final piece of the authentication system is the App. The App is designed to run on iOS™, Android™, and Windows™ phone/tablet devices that support NFC technology and will be available in the Apple App Store™, Google PlayStore™, and Windows Store™.

The App will translate the data on the Crypto-Tag™ and the blockchain and notify the end-user if a product is authentic. As mentioned in the section, titled “BONA TOKENS,” users must spend BONA tokens in the App to receive authentication. BONA tokens will also be available for purchase within the App.

In Figure 5, we have a basic user interface on how the App will deliver the authentication to the user and the relevant data that will be used to verify the authenticity of a product.Image on the left represents an authentic item and the right is counterfeit.


Security Features of Crypto-Tag™


The Crypto-Tag™ has several security features built into it. First, it will destroy itself that when the tag is physically removed from the original item. Second, it has digital cryptography built in such that a mere copy is not going to work.

The Crypto-Tag™ will be sold directly to the brand/manufacturer. From there, only the brand/manufacturer will place each tag into each product during production and the product’s identity will be recorded on to the Blockchain as the product leaves the manufacturing site. Each tag would be encrypted with a manufacturer’s unique private key, location, time, date, and a serial number. The tag will be uniquely tied to that specific item. Thus, even if an would-be counterfeiter create more quantities than authorized, the blockchain would be able to show any counterfeited items produced since all items are recorded on the blockchain. If an item is not recorded on the blockchain, then it is a counterfeited item.

As the item moves from one location to the next through the supply chain, additional data will be added to the Blockchain for that specific item. The incentive for each entity or party of the supply chain is to make sure they only have real products are scanned. Any non-authentic items recorded will show the entry point of the counterfeited item into the system.

If they have fake goods, they will not be able to sell the good to someone who is looking for something genuine. Counterfeit goods will still exist because there is a demand for them, but our solution is to protect the consumer who are looking to buy genuine goods; therefore, retailers and distributors who are serving the consumers for genuine goods are incentivized to only get genuine goods that will pass the authentication process by the end-consumer.

Security Features of m™ Continued


In addition, there is no motivation to steal the Crypto-Tags™ from an authorized factory where the goods are manufactured and where the Crypto-Tags™ are installed. The real items are recorded on the blockchain, while the fake goods with stolen tags will not. This would reveal a source of the theft and expose the counterfeiters.

There are a few ways people will try to cheat. Jordans are used as an example: —Unlicensed manufacturer purchases Crypto-Tag™ from the black market, produces fake Nike’s and adds tag on their fake product and tries to sell it: Here’s why this won’t work because when a retailer or the consumer scans the product with the mobile application, it will not pass the authentication test. Only the actual brand or licensed manufacturer has possession of the correct Crypto-Tag™ with the proper credentials for each product.

—A third-party seller extracts the Crypto-Tag™ from a genuine Jordan’s and embeds it in a fake Jordan: Here’s why this is a problem. First, the genuine Jordan’s are now invalid and there is no way to validate that pair, so it becomes unsellable unless a consumer wants to purchase an unverified pair of Jordan’s. Second, once the Crypto-Tag™ is removed from the original item, the tag tears off and self-destructs. So putting it in a fake pair of Jordan’s will not pass the authentication test.

The Crypto-Tag™ is designed so that only the brand/manufacturer can enable the Crypto-Tag™ with an item. And the journey through the supply chain adds layers of data that will ultimately be verified by the end-user.

Monetization of Crypto-Tag™


Company estimates that Crypto-Tag™ would cost about $0.20 per piece at production quantities. The tags would be sold at $0.95 each for a basic model, representing 375% gross product margin. Initially, company would freely distribute the tags for limited trials at each major customer sites. These would include manufacturers of pharmaceuticals, electronics, food, automobile parts, toys and fashion goods.

There would be rewards mechanism implemented for Crypto-Tag™/Phone App/BonaU-Token system. The phone App would require a minimum BonaU-Token amount, $0.10 for example, to be able to scan the Crypto-Tag™. But, a brief production survey or owner registration would be rewarded with a BonaU-Token transmitted by the manufacturer. Such rewards would motivate consumers to engage with the manufacturer. Each BonaU-Token may allow up to 10 scans and motivate customers to continue to engage with manufacturers.

At the marketing campaign continues, it would be evident that the customer engagement with the manufacturer will create a big data. And, company would monetize the marketing data gathered.

Tokenomics of Bona Token


Company currently plans to mint two kinds of tokens, security and utility. The security tokens will be called BonaS-Token. A total of 100,000,000 BonaS-Tokens would be minted. The utility tokens will be called BonaU-Token. A total of 100,000,000,000 BonaU-Tokens would be minted.

Since BonaS-Tokens are security tokens, these would represent shares of the company. However, there would be no voting rights and no dividend benefits. While there is no national security token exchanges approved by the Security Exchange Commission exist today, it remains to be seen if such exchange would be established in the United States America soon.

As for the utility tokens, BonaU-Token, it will represent no shares of the company and have no monetary value other than those required to have a minimum value to be listed on coin exchanges around the world. However, the BonaU-Tokens would serve to fuel the phone App and allow users to be able to authenticate the goods and scan the Crypto-Tag™. The manufacturers would transmit the BonaU-Tokens to its customers as part of its rewards to engage with customers.

Company also plans to freely give away a limited amount of the BonaU-Tokens during its marketing campaigns. At its sole discretion, the BonaU-Tokens would be given away to public for purpose no other than to use it on the phone App to authenticate goods.

Figure 6, Bonafi’s Authentication System, (U.S. Patent Pending, [6])


The Big PictureAs shown in Figure 6, Bonafi’s authentication system will utilize the following four major components to authenticate products: Crypto-Tag™, mobile App, the BONA tokens, and the Blockchain.

1. The verification process starts with the manufacturer adding the Crypto-Tag™ toa product with the cryptographically encoded identity data and creating a block of data on the blockchain using the Application.

2. Additional data is added to the blockchain via Crypto-Tag™ and the mobile Application.

3. BONA tokens are used to power the App and receive authentication data from theblockchain network.

With the power of blockchain technology and everyday mobile devices, Bonafi is determined to mitigate counterfeits from entering the market.

Other Data


Roadmap

Build the TeamCrypto—Tag™ Development

Release Alpha Version Social Media Marketing Form Partnerships

Mobile App Development & Demo

Social Media Marketing Form Partnerships

Release Beta VersionEngage CustomersForm Partnerships


TeamFounder/CEO/CTO—Steve Kuh20+ Years as Founder/CEO of Digital Technology FirmBSEE, MSEE from University of Southern CaliforniaU.S. Patent Pending on a Blockchain Technology Digital Label

Steve is interested in providing solutions to combat counterfeit goods using blockchain technologies. The blockchain technology presents opportunities to solve many social issues, such as counterfeits, identity and credit card plastics in wallets, and digital security tags in general. With the launch of Bonafi, it is hoped that products are developed from current prototypes to custom solutions that will be marketed to take advantage of the blockchain based decentralized digital public ledger and change the world one person at a time.

With over 20 years of experience as founder and CEO of an IT firm, his specialty includes communications systems engineering, creation, and production of digital IT products.

Chief Marketing Office—Abraham Kim11 Years Digital Marketing

Abraham spearheads the PR and marketing campaigns. Working closely with advisors Simon Cocking and David Drake, Abraham creates the necessary updates and engagements to keep current and potential investors in the loop while keeping the public in-the-know with current and future developments of Bonafi.

Abraham Kim is an expert in digital marketing strategies and delivering high-converting traffic for businesses in the e-commerce and B2B space. With experience managing over US$2.5 Million of ad spend, he has been the go-to strategist when it comes to Facebook, Google, Instagram, and influencer marketing. By integrating analytics from various advertisement and web platforms, Abraham has a 6th sense for understanding and leveraging the online behavior of consumers to produce results.


TeamCreative Director—Daniel KuhDaniel Kuh is the Creative Director and App development. His expertise lies in UI/UX and will be working closely with the developers on board to create a seamless Application for the end user. He is also Bonafi’s in-house graphic designer for all of our graphic design needs.

With previous positions as lead designer and director of design at multiple startups, Daniel plays a critical role in turning Bonafi’s creative visions into a reality.

Advisor—Simon Cocking22 Successful ICOs

Simon has been working as an advisory board member for several ICO launches who have achieved their ICO targets, to help with marketing, media, PR, and strategy by leveraging his digital footprint of 115,000 followers on Twitter (31% in the US) and 22,000 on LinkedIn.

Simon is also the Senior Editor at Irish Tech News, Editor in Chief at CryptoCoinNews, and freelances for Sunday Business Post, Irish Times, Southern Star, IBM, G+D, and other publications.

He is also a business mentor and advisor working with 20+ successful ICOs to date. He has also been named on ten global Twitter influencer lists in the last 12 months.He is an accomplished public speaker at events including TEDx, Web Summit, Dublin Tech Summit, and overseas in Dubai, Singapore, Moscow, Tel Aviv, Madrid, Tbilisi, Riga, Porto, Dublin and Helsinki in the last 12 months.

Chief Financial Consultant—Craig ClaytonCraig has experiences over 20+ as CFO/CEO/Principal in strategic planning and business modelling for Startups. Raising seed capital. Lines of credit. Forensic Accounting. Forensic Accounting Projects. Due Diligence for Mergers and Acquisitions. Small Business Financing. Software Company Valuations. Banking Analysis and Reconciliation. Trust Accounting and Audits. Information Technology Strategic Planning. Currently, managing partner at Rochart Consulting.


TeamAdvisor—David DrakeChairman at LDJ Capital

David Drake is Founder and Chairman at LDJ Capital, a multi-family office which deals in various funds worldwide with over $1.5 trillion in assets, and maintains over 50+ global directors and family office partners.

More recently, Mr. Drake is also seen as a leader in cryptocurrency. Mr. Drake saw the value of digital assets when everyone was avoiding it. It all started in 2011 when Mr. Drake collaborated on the JOBS Act to create new laws underlying all fundraising in the U.S. for all ICOs. His crypto hedge funds hold crypto, ICOs, and fintech equity as seed inves™ents to help new coin to be made via ICOs. His company also offers bridge financing to seed upcoming ICO’s.

Mr. Drake was born in Sweden and is fluent in six languages. He holds an MBA in Finance and an MA in International Law and Economics from George Washington University in DC where he was awarded the Wallenberg Scholarship for academic merit.

SEC Law Counsel—Lora AlexanderLora provides interpretative advice and guidance to broker-dealers regarding FINRA Rules, state and federal securities laws, including the Inves™ent Advisors Act of 1940, and the relevant regulations. She drafts Terms and Conditions and Privacy Policies for websites for securities-related services, legal memoranda, including briefs, motions, and complaints. She also reviews Whitepapers for Initial Coin Offerings for compliance with federal securities laws and registration requirements.

She drafts Written Supervisory Procedures and Compliance Manuals for broker-dealers for compliance with FINRA regulations. Also, she prepares requests for No-Action Letters, Stock Option Agreements, Subscription Agreements, Crowdfunding Applications, and Private Placement Memorandum for SEC filings under exemptions from registration under Crowdfunding, Regulation A or Regulation D.

Lora is a partner at Doumar Martin, PLLC, in Arlington, VA.


Terms Of Token Sale

Terms of Token Sale will be available upon approvals from SEC


References[1] Wikipedia, Blockchain, [https://en.wikipedia.org/wiki/Blockchain]

[2] Economist Staff (31 October 2015). “Blockchains: The great chain of being sure about things”. The Economist. Retrieved 18 June 2016.

[3] Federal Information Processing Standards Publication, FIPS PUB 180-4, “Secure Hash Standard (SHS), August 2015

[4] Whitfield Diffie; Martin Hellman, “New directions in cryptography”. IEEE Trans. On Information Theory. Vol 22, Issue: 6, Nov 1976

[5] Global trade in fake goods worth nearly half a trillion dollars a year - OECD & EUIPO[http://www.oecd.org/industry/global-trade-in-fake-goods-worth-nearly-half-a-trillion-dollars-a-year.h™]

[6] Steve Kuh, System and Method for a Blockchain Digital Label, U.S. Patent Provisional Application, No. 626220670, Jan 23, 2018.

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