- Mecidi Ventures, a subsidiary of Overstock.com, is collaborating with VinX to create a wine futures trading platform.
- Blockchain technology will be used to manage the supply chain within the wine industry to prevent fraud.
- It is estimated that at least 20 percent of wines in the world are counterfeit.
Overstock.com CEO, Patrick Byrne has announced a new business move where Mecidi ventures, his business subsidiary company, intends to invest in wine futures trading. This isn’t Byrne’s first foray into the world of blockchain technology. His site was one of the first adopters of Bitcoin payments and Byrne himself has heavily invested in Bitcoin.
This new investment will take place as a collaboration with another company, VinX, which plans to create a token-based digital wine futures platform.
The platform will take a cue from the Bordeaux futures model and will allow for the purchase and sale of wine futures on a secure platform.
This does not only benefit investors from a sales perspective but also from a security standpoint. Because trade is carried out on a DLT platform, transactions can be tracked, thus reducing the chances of fraud.
Why This is Needed
The wine industry is a huge one, with billions being spent every year. It does, however, have the problem of counterfeit labeling with fraudsters putting false labels on locally sourced wines and selling them at a higher price. According to statistics, this affects up to 20 percent of wines worldwide.
This is where blockchain technology can be used to minimize instances of fraud by tracking its supply chain.
Byrne said:
“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.”
This doesn’t apply only to the wine industry but every industry that deals with supply chain management is prone to some level of counterfeiting and mishandling of goods.
Blockchain technology is now being applied in these industries and its secure nature means data can hardly be manipulated and fraud is less likely.
“We are democratizing the capital structure of the wine industry by bringing consumers in direct contact with producers early in the wine-making cycle. We are riding the wave of direct-to-consumer, which Overstock has been a leader of for almost 20 years,” VinX co-founder and CEO, Jacob Ner-David said.
