Sauvignon Blockchain
Tags: Crypto, Blockchain, Wine, Disruption, Wine Industry

In vino veritas – “In wine, there is truth.”

So too, in the mighty blockchain.

So clear the path to the grand Châteaux doors as the Vino disruption is afoot. Oh, you’d have to be drunk my Dauphin to not see this coming.

Medici Ventures, a wholly-owned subsidiary of Overstock.com, has announced its latest strategic investment venture. According to Overstock CEO Patrick Byrne, the blockchain-focused company is investing in the VinX platform. Its vision — to disrupt and disintermediate the wine industry.

VinX is a futures platform first to integrate blockchain technology into the age-old wine industry. The platform’s main focus is to facilitate consumer-direct access to wineries, building relations with loyal patrons and wine communities, but more importantly, to streamline funding through wine futures selling.

Blockchain En Primeur

Wine futures, or En primeur to the epicures, is the primary feature in the VinX platform. The concept takes after the Bordeaux futures model where wines are made available to the public for early purchase – approximately a year to eighteen months before distribution. Although unpredictable, as market forces still apply, its speculative nature is nonetheless plausible to a degree, which gives wine lovers and investors a chance to purchase their favourite vino cheap while still in the barrel. Tokenised and powered by the Zen Protocol on the immutable blockchain, VinX boasts of a technological cuvée that will transcend the archaic infrastructure of the wine industry.

“Whatever you do, pour yourself into it.” – Robert Mondavi

As we all know, the production of wine requires Christ-like unwavering patience. Ask any vintner and they will tell you that forbearance is requisite in every vintage ever created. The long-winded process from harvest to retail takes on average, one to three years which slightly varies from one vineyard to the next.

Regardless of process or duration, the financial cycle in wine-making implies that wineries endure a financial gap. VinX aims to address the inefficient structure of the wine industry, negating the need to wait for the last vintage profits to fund the next vinification.

Through futures sales, wineries generate a working capital that ensure grapes can be harvested on schedule and do not go to waste, and because VinX futures are tokenized, liquidity is provided through its exchange, establishing buyer-confidence in knowing their investments are unalterable and secured in a decentralized and distributed ledger.

The 3-Tier System

For more than a century, the wine industry carries one of the most highly inefficient distribution processes known to man due to its intentional design, where a staggering two-thirds of the wine’s value is lost in distribution.

The American Anti-Trust Act of the 1890’s was primarily established to control alcohol consumption by introducing the “three-tier system.” A purposefully inefficient system of multiple intermediaries between the producer and the imbiber, resulting in a hefty priced bottle at retail.

Yet the more serious implication of a “three-tier system” structure is that consumers are without direct interaction with either vintner or winery, leaving them to rely solely on a seller’s reputation and the principle – caveat emptor. But despite the strictest adherence to due diligence, an eager connoisseur can easily fall victim to an intricately crafted forgery, magnified greatly if the decanted wine comes with a poetic journey.

Rudy Kurniawan (Photo: nytimes.com)

Breaching the ramparts of the loftiest tower

Through the ages, wine has been synonymous with art and high society. Depicted in Renaissance paintings, poured by both vicars and aristocrats, signifying alliances and shared amongst good spirited men in gleeful gatherings. However, the social stratum of the wine glitterati has suffered a stigma that left a mouldy-newspaper aftertaste of shame that reverberated amongst the oenophilic socialites.

In Sour Grapes, Rudy Kurniawan joins the lavish world of the bon vivants, displaying the elegant art of the con as he roisters with the aristocratic milieu. Lacking a cat and a magician’s hat, Rudy conjures a bottle of 1923 Rousseau Chambertin at the last minute of an “angry men” gathering for which he receives praise and admiration from these gentrified elites.

Yet for all their expensively honed skills in wine profiling, Rudy, unbeknownst to his well-heeled compatriots, drowns their sophisticated palates in plain swill. However, contrary to what many may think, the con required very little bravery — the rarer the bottle, the easier the hustle. Besides, how many palates exist to know the actual taste of such bottled rarity? Thus, to his affluent victims, it was nothing short of an exhilarating experience of a magical ’23 Chambertin.

He sold to wine barons, hedonists, connoisseurs, and sommeliers and had their cellars furnished with rarified bottles of ‘85 Côte-Rôtie La Mouline Guigal, ‘45 Château Mouton Rothschild, and ‘66 Domaine de la Romanée-Conti – just a few of his many impeccable forgeries.

To that end, VinX aims to put a cork in the fraudulent widespread of beautifully bottled expensive vinegar.

“Excuse me, waiter, there’s fake wine in my glass.” — Mike Steinberger

Patrick Byrne said in a Forbes interview:

“Like any economy, the wine industry has difficulty scaling its middlemen-heavy systems in parallel with the growing demands of an increasing global market. 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.”

As each bottle is printed with a unique QR code, the buyer can then verify the source and authenticity of the product, easily validated by a mobile app. Jacob Ner-David, chief executive and co-founder of VinX said: