Wine trading platforms are on the rise as the industry begins to acknowledge the benefits of electronic tracking and blockchain’s secure guarantee of provenance.
Wineries adapting to using blockchain for increased transparency of the product are not new within the industry. There are several wineries and retail sites now using the new tech, some including Bitcoin for wine purchases.
With fine wine, provenance is vital; it is the factor which develops trust between growers and traders. The history of a bottle or a particular vintage is key to its success and can make or break a grower if the wine doesn’t match its supposed provenance. Clearly, the very nature of blockchain and what it can offer in terms of product transparency and guaranteeing the story behind it from grape to table, has not gone unnoticed by the industry which survives to a great degree on trust.
Platforms such as the CWEX Exchange, backed by Swiss-based DotChain GMbh, are one of the many of such now appearing, adding a heightened level of guarantee to wine provenance. CWEX issues blockchain based ownership certificates with each bottle, consequently decreasing processing fees and resulting in buyers profiting from a huge 80% rise on their initial investment.
Prior to blockchain, after numerous cases of false provenance issues resulting in lawsuits and subsequent convictions of the perpetrators involving millions of dollars, companies such as Cavex and Wine Owners were launched in order to reinstate some level of trust back into the industry, although such companies were principally aimed at private investors. These companies managed to cut out third-party brokers, thereby helping eliminate the risk of fraud with peer-to-peer sales.
The most significant merchant emerging from the rise of this new way of conducting business was LiveTrade in 2009, offering its own version of a two-way platform for electronic wine trading. However, it is blockchain-based companies like CWEX that attract those who wish to have cryptocurrency holdings of real-world assets, as well as a guarantee that the wine that they purchase is the “real thing”. CWEX’s CEO argues the case:
“Blockchain technology has the potential to disrupt and revolutionize all Industries. CWEX is taking a small step in the right direction to offer more flexibility and possibilities to cryptocurrency owners.”
Selling wine on the blockchain doesn’t have to be a huge enterprise, as Mike Barrow of Costaflores Organic Vineyard in Lujan de Cuyo, Argentina, discovered. This year he sold 16,448 bottles at USD 4.74 per bottle after tax. It is visible on the published accounting ledger, using blockchain technology so that consumers can track the vintage from grape to bottle. Costaflores now has its own cryptocurrency token, which now trades on the open exchange. As Barrow says:
“Creating a wine-backed crypto asset is not about driving the price up to absurd levels… It’s about qualifying value and honesty in wine.”
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