Overstock.com and its CEO and founder Patrick Byrne are long time believers in Bitcoin. The company was one of the early adopters of Bitcoin payments on its site, as well as a strong investor in the digital currency as a revenue asset. Now, Byrne is looking to invest further in underlying technology through its blockchain accelerator and subsidiary, Medici Ventures. By investing further, the company hopes it will discover what it can do it terms of streamlining wine futures trading, while also reducing fraud through secure supply-chain tracking.
Medici Ventures announced a tactical investment with blockchain company VinX which plans to fabricate a token-based digital wine futures platform based on the Bordeaux futures model. VinX’s plan will enable selling and trading of wine futures on a vitreous and secure blockchain. The supply chain tracking will also assist in reducing fraud in high-end wines.
Forbes reports that 20 percent of all wine throughout the world contains counterfeit labeling, so what a consumer believes is a ‘high-end bottle of wine’ could actually have a more local origin. “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 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.”
Although the wine distribution network is yet another industry that is joining blockchain, there is an abundancy of potential for disruption. The distributed ledger technology is an ideal ledger for supply-chain information to be stored on, especially when fraud and corruption is conspicuous.
“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,” Ner-David said.
“In addition, because 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,” he says.
Medici Ventures president Jonathan Johnson explains that the blockchain accelerator and subsidiary of Overstock.com has been ‘bullish on blockchain’ for over four years now. “Medici Ventures has been focused on advancing blockchain technology for nearly four years. We have more than 15 portfolio companies that are doing that. This investment is not a comment on the cryptocurrency market at all; it reflects our continued bullishness on the disruptive and revolutionary impact we expect from blockchain technology,” Johnson said.
“Our goal is to change the world by advancing blockchain technology. We believe that by advancing blockchain technology we can bring the people of the world closer together. By eliminating the need for trust institutions to stand between us, blockchain offers humanity the chance to re-engage and connect once again as people.”
He also explained how VinX proved its potential as a worthy strategic investment partner saying: “It is often difficult for even the most seasoned collector to identify fake wine. Consider the experiences explained in the documentary Sour Grapes. To combat this growing concern, VinX plans to use blockchain to connect wine lovers directly with wineries, eliminating fraudulent middlemen within the industry and providing customers with a direct line to the source of the products.”
“Medici Ventures has been looking for a good supply chain investment in the blockchain space,” he continues. With the VinX team’s industry experience in the wine industry and in software development, we’ve found an opportunity we really like.”
