According to a recent announcement, blockchain accelerator Medici Ventures, a subsidiary of Overstock.com Inc., has invested in Israel-based startup VinX, which is creating a token-based blockchain platform to reduce fraud in the wine futures market.
A future is essentially a reservation for a wine that will be bottled and released one to two years down the line. By buying futures, wine enthusiasts can secure bottles that may be incredibly expensive or nearly impossible to obtain when they hit the general market.
Like many blockchain-based supply chain startups, VinX aims to track provenance so that customers know exactly where their wine comes from. Apparently, 20 percent of all wine in the world is counterfeited. Many individuals purchase wine futures through a fraudulent intermediary believing that the final product will come from a well-regarded region such as Bordeaux, but the wine they receive may not be authentic.
With VinX's blockchain platform, however, customers will reportedly have access to an immutable record of the wine supply chain without the need for a middleman. Patrick M. Byrne, founder and CEO of Overstock, expressed his enthusiasm for the project:
"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."
Further, Jacob Ner-David, co-founder and CEO of VinX, spoke to the benefits he sees with the platform and the partnership:
"[B]ecause we are registering all wine futures as tokens on a blockchain, we are bringing a powerful validating force that will go a long way toward reducing fraud. VinX looks forward to benefiting from the many years of e-commerce experience of Overstock and the blockchain leadership of Medici Ventures and the rest of the Medici Ventures portfolio."