Overstock's Medici Ventures backs startup building blockchain for wine sales
Overstock.com's blockchain accelerator Medici Ventures is investing in Israel-based VinX, a company developing a blockchain platform that aims to reduce fraud in the wine industry through secure supply-chain tracking from product provenance.
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The intent is to create a token-based digital wine futures platform based on the Bordeaux futures model that allows for the selling and trading of wine futures on a blockchain to a global scale. VinX estimates that 20 percent of all wine in the world has counterfeit labeling, meaning that what consumer believes is a high-end bottle of wine could actually be a low quality knockoff.
"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 Overstock founder and CEO Patrick Byrne. "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."
Also: How using blockchain in the supply chain could democratize innovation itself
Blockchain is the renowned encrypted database architecture that logs and links all transactions on a tamper-proof ledger distributed among multiple parties. Time-stamped transactions over a blockchain create an immutable golden record related to any product that can be bought and sold. In the supply chain, blockchain is used as a means to increase transparency, add visibility and improve supply chain economics.
As for Overstock, the Utah-headquartered online warehouse of goods famously crowned itself as the first online retailer to accept the digital currency Bitcoin as payment. Overstock works with Coinbase.com, a San Francisco-based cryptocurrency exchange dedicated to the buying and selling process of Bitcoin, to process payments and convert Bitcoin into US Dollars.
When Bitcoin payment acceptance rolled out on the site in 2014, Byrne gushed over the potential for digital currency to reshape the global financial system, explaining that "as one who believes in limited government, this attracts me because it is a form of money that no government mandarin can will it into existence."
The dollar amount of the VinX investment was not disclosed.
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