Overstock.com, Inc., through its wholly-owned subsidiary Medici Ventures, is investing in VinX, a blockchain company that tracks wine futures, the Associated Press reported.
The collaboration is meant to improve supply chains in the wine industry. It is “conservatively” estimated that 20% of the wine in the world is labeled fraudulently.
Overstock founder and CEO Patrick Byrne said, “[T]he wine industry has difficulty scaling its middlemen-heavy systems in parallel with the growing demands of an increasing global market. 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.”
VinX co-founder and CEO Jacob Ner-David, said, “VinX is democratizing the capital structure of the wine industry by bringing consumers in direct contact with producers early in the wine-making cycle… [B]ecause 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.”
VinX sees a $200-billion “opportunity size” in the market for the wine trade using distributed ledgers. The startup began pre-sale of its ‘Vin’ token, which runs on the Zen Protocol blockchain, in the second quarter of this year.
On its website, VinX projects the end of its first harvest season in the first quarter of 2019, with an initial group of wineries participating.
The company foresees being able to handle “thousands” of wineries who want a more direct connection to their consumers, through the trade of futures. It says that in the current distribution model, wineries receive only one-third of retail revenue.
Medici Ventures is also looking at issuing a blockchain-based currency for the Netherlands Antilles, with which it has signed a memorandum of understanding.
Among Overstock’s other blockchain ventures is tZero, a regulated exchange for token sales, which is seeking regulatory approval.
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