Overstock.com’s blockchain accelerator and investment platform Medici Ventures has made a strategic investment in VinX, a blockchain technology designed to reduce fraud and to ensure prevenance within the wine supply chain.
Founded and advised in Israel last September by a team of winery owners and tech entrepreneurs, VinX is using the “secure and immutable aspects of blockchain” to track wine from its origin to its end-point with the consumer, and to build a token-based digital wine futures platform based on the Bordeaux futures model that will allow for an even playing field for wine transactions on a global scale.
“VinX is democratizing the capital structure of the wine industry by bringing consumers in direct contact with producers early in the winemaking cycle,” said Jacob Ner-David, co-founder and CEO of VinX. “We are riding the wave of direct-to-consumer, which Overstock has been a leader of for almost 20 years.”
In Vino Veritas
Fraudulent wine is nothing new; it dates back to the first century in Rome. Today, however, the problem is being experienced on a greater scale. Since the 1990s instances of wine fraud have been steadily rising, now accounting for nearly five percent of the global secondary wine market valued at $15 billion, according to the paper Blockchain Based Wine Supply Chain Traceability System released in 2017.
A range of measures have been implemented to attempt to alleviate the issue, including carbon dating, nuclear isotope identification, and RFID tracking, however these techniques all have their limitations, and only begin being effective after bottling. Blockchain, meanwhile, can ensure a person-to-person chain of commerce from the grape grower onward, and has the power to disrupt the $300 billion-plus global wine industry.
“Like any economy, the wine industry has difficulty scaling its middlemen-heavy systems in parallel with the growing demands of an increasing global market,” said Patrick M. Byrne, CEO and founder of Overstock.com. “VinX’s steps in tokenizing 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.”
In China, the problem of wine fraud is particularly prevalent, where reports indicate that half of the Chateau Lafite-Rothschild consumed in the country is fraudulent, according to Coin Telegraph.
There, a Shanghai-based startup VeChain is piloting a blockchain system that will be able to provide consumers with details about the wine’s winery of origin, grape variety, information about when the bottle transferred from storage to a bonded warehouse, and on to retail locations.
Blockchain has already made noticeable headway in various ag sectors, with Louis Dreyfus being the first global trader to complete a total blockchain-based grain transaction for a cargo of soybeans shipped to China.
Filament, which has offices in Reno, Nevada, Denver, and San Francisco, and which is a product of the Techstars accelerator program, raised $5 million in Series A funding in 2015 and, in March 2017 raised $15 million in new venture financing to advance TAP, a platform used for the purpose of sharing soil data from a particular field among farmers.
California-based Skuchain also has developed a blockchain platform for barcodes and RFID tags designed to prevent counterfeiting which has already being applied to the agriculture industry.
More recently, Earth Twine, a collaborative technology company dedicated to bringing leading-edge technologies to bear on traditional food supply chains, and Stratis, a developer and provider of end-to-end blockchain solution applications, partnered to launch The Earth Twine-Stratis Platform, the world’s first blockchain platform dedicated to the seafood industry.
Other recent blockchain developments along the food and beverage chain shared by GAI News include the announcement in July of this year by food safety technology startup FoodLogiQ of the launch of a blockchain pilot in partnership with a select group of customers, which will begin in Q3 of this year.
Partnering with AgBiome Innovations, Subway/Independent Purchasing Cooperative, and existing investors Testo and Tyson Foods, this initial pilot program will test the viability of blockchain to increase transparency within the food supply chain.
Adelaide-based startup T-Provenance raised A$500,000 in April of this year to help pilot its blockchain technology with Northern Australian mango producers, and in January of this year, another Australian blockchain startup, BlockGrain, raised the equivalent of approximately $1 million in cryptocurrency from the $90 million NEM Blockchain Investment Fund.
-Lynda Kiernan
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