One in five bottles of wine has false labelling, an issue that Medici Ventures (a subsidiary of US online retailer Overstock) wants to resolve by creating a token-based digital wine futures platform based on the Bordeaux futures model.
The firm has announced a strategic investment in VinX, a blockchain startup, to build the platform that will help reduce fraud in high-end wines.
The new system allows supply chain tracking that will help those involved in the business to sell and trade wine futures on a transparent and secure network.
“Like any economy, the wine industry has difficulty scaling its middlemen-heavy systems in parallel with the growing demands of an increasingly global market,” says Overstock.com CEO Patrick Byrne. “VinX’s steps in tokenising wine futures while allowing wine enthusiasts to know without a doubt that the bottles they purchase are filled with authentic wines will position the entire industry as a model of a new global economy that replaces old boys’ networks with frictionless trust through technology.”
The global wine market is worth about $302 billion, and customers spend about $3 billion on counterfeit wine.
VinX Founder Jacob Ner-David says that “by bringing consumers in direct contact with producers early in the wine-making cycle, we are riding the wave of direct-to-consumer, which Overstock has been a leader of for almost 20 years”.
Medici Ventures President Jonathan Johnson told a news outlet that a lot of intermediaries in the wine industry could be eliminated with blockchain. He added that “there are many problems with counterfeits. We also think this technology is democratising the purchase of wine”.
Swedish startup Chainvine is also venturing into the fake wine tracking business, while Everledger claims to be the first tech firm to have ever registered a bottle of wine on the blockchain.