A verified wine can greatly increase in value. This chain of custody isn’t just a history lesson. It gives buyers an expectation of the quality given the past caretakers. However, most importantly, it helps buyers reduce fraud. Just like an Ebay seller, wines rely on a reputation system. Therein is the problem – trust. Bitcoin’s solution to trust in the financial market is the same problem Vinfolio hopes to solve for wine.
Vinfolio points out that wine provenance is expensive and time consuming:
The fine wine industry has a problem. There is a lot of forged wine in circulation, and there is a lot of wine that is not properly cared for as it travels the world. The answer to these problems is to verify the provenance of the wine. The hard thing about verifying provenance is that there is no central database or standardized industry practices that one can leverage. Each wine must be evaluated by an expert for signs of authenticity, and each person selling wine is evaluated on their clout within the wine industry.
The major problem Vinfolio identifies is that a forger can purchase a bottle for $500, study it and then produce fraudulent cases. Each case could bring as much as $6,500. Although lesser-quality forgeries have disappeared as the industry currently adopted special inks, microchips and holograms forgers who can replicate these methods take advantage of the sense of security these devices provide.
Vinfolio wants wine manufacturers to tie their bottles to bitcoins. When a bottle sells, the purchaser receives the bitcoin tied to the individual bottle. As the bottle gets traded, the bitcoins are transferred to the new owners. Though they admit, this is not a silver bullet for wine fraud they outline the use cases for using Bitcoin to track physical wine for appraisal and authentication on their site. Vinfolio started in 2003 as an e-commerce site that buys, sells and collects wine. Vinfolio received $4.5M in Series A funding September of 2009
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Last modified (UTC): October 12, 2014 12:12