Authenticating NFT wine with blockchain

A newsletter from Stansberry Research appeared in our inboxes recently that included a piece about Laava partner?Vinsent, a digital wine marketplace powered by blockchain. Vinsent enables wine lovers from across the globe to connect directly with wineries. It’s now trading in both wine?non-fungible tokens (NFTs)?and physical, bottled wine.

The piece was written by?Eric Wade, Editor, Crypto Capital at?Stansberry Research, an independent financial research firm that produces unbiased advice on topics around investment and income, technology, market trends, macroeconomic analysis, and options trading. Stansberry publishes proprietary insights to more than 350,000 individual subscribers in more than 100 countries.

The CEO of Vinsent is?Jacob Ner-David, an entrepreneur and self-proclaimed “wine guy”. “Ner-David’s company is revolutionising the wine industry,” writes Wade. How? He’s solving one of the biggest problems that winemakers around the world face – especially winemakers who are exporting to markets in Asia.

“Let’s begin at the top with the major problem in the wine industry. I’m talking about counterfeit wine – and, more specifically in this example, counterfeit wine in China.”

Eric Wade, Editor, Crypto Capital at Stansberry reasearch

Remind me again: what is an NFT?

If you’re already across the NFT scene, and how the wine world is fast finding a home there, skip down to the?next section. For a quick refresher, read on…

We like this NFT definition from?CNN Business: “In the simplest terms, NFTs transform digital works of art and other collectibles into one-of-a-kind, verifiable assets that are easy to trade on the blockchain.”

NFT stands for “non-fungible token”, which means an asset that doesn’t have a physical representation in the real world; an NFT is a purely digital asset linked to the blockchain. And the blockchain? That’s the digital database that underpins cryptocurrencies: Bitcoin, Ravencoin, Ethereum and more.

It’s widely acknowledged that the NFT market was worth more than $25 billion in 2021. Among the most valuable NFT sales in 2021 was a digital collage by American digital artist Mike Winkelmann, auctioned for $69.3 million in March. At the time, that made the work one of the most valuable pieces of art ever sold by a living artist.

It’s further acknowledged that counterfeits and fakes are rife in the NFT market. One platform flagged 90,000 potential NFT fakes in just three months. NFT marketplaces, such as OpenSea, who hosted the NFT sale for Michael Yamashita’s MY Earth Collection (with authentication secured by Laava Smart Fingerprints?) are doing what they can to encourage reports of fakes and remove them from sale. However, it’s a can of worms that doesn’t yet have a solution.

What do NFTs have to do with wine?

Just like a work of art, a bottle of wine is unique and cannot be reproduced. When we think of NFTs, we think of rarity, exclusivity, desirability, traceability – in short, all of which applies to fine wines.

Australia’s most prestigious wine maker, Penfold’s, has launched an NFT project, selling wine that will not be bottled until the end of 2022, and released towards the end of 2023. Three hundred bottles from a single barrel will be sold as wine futures, with each bottle identified by the barrel and bottle number – with the entire bottling process verified through the blockchain. Wine lovers who buy the NFT will be able to redeem their token for the physical bottle once it’s ready, if they don’t first re-sell or transfer ownership. (Source:?Hypebeast)

“Gen Z and millennials don’t see a separation between the digital and physical worlds, and these generations are the ones that will create future revenues for the Chateaux of Bordeaux … While traditional collectibles are created and defined by institutions and find value in their historical staying power, modern collectibles are fueled by popular opinion and find value in demand and ingenuity.”

Guillaume Jourdan, Writing for Jane Anson?Inside Bordeaux

How Vinsent’s marketplace creates authentication for wine NFTs

We know that counterfeit wine is a huge problem for winemakers around the world. In 2017, the official wine bureau for the Bordeaux region claimed that 30,000 bottles of fake imported wine were being sold in China every hour. They said that many reputable Chinese wine sellers had decided not to stock some popular French wines, as fakes were so widespread.

Apart from the practice of mis-labelling, or refilling an empty wine bottle with a product of inferior quality, it’s impossible to know whether a valuable wine has been handled properly. Storage and transport are critical to the long-lasting quality of a wine.

Even Laava CEO?Gavin Ger?has experienced first-hand the disappointment of buying a mis-labelled bottle of wine. (Read more in our?blog post here.)

Eric Wade reported that Vinsent aims to solve these problems with a combination of mobile-app and blockchain technology: selling verifiably authentic wines through its own marketplace, and using blockchain technology to launch new tokens.

“These tokens are used for everything from land governance to tracking the ownership of fine wines and facilitating the handover from the winemaker to the final customer,” Wade wrote.

“Every wine merchant that uses the platform gets to control their own tokens. That means you can always tell if your token is genuine by visiting a simple website to see everything that has ever happened on the blockchain.

“Wine merchants can even use Vinsent’s system to assign each vintage its own identifier… That way, you can know for sure that a limited quantity is just that. If the winemaker is offering 91 cases, for example, only 91 tokens will be available.”

And now for wine futures… blockchain technology, combined with Vinsent’s verified marketplace, means winemakers can sell their wine before it’s in the bottle, and buyers can have that authentication process every step of the way, whether they end up with the physical bottle or trade the NFT before the physical asset is realised.

Laava provides the on-product – and on-blockchain – trust mark for individual bottles of wine.?

In Wade’s words: “Once a bottle is certified, customers can scan the Fingerprint with their iOS or Android phones. Instantly, you’ll receive proof of authentication… And then you can check the blockchain to make sure the certificate itself is the real deal.

“In other words, there’s now even more wine activity happening on the blockchain today.

“Since many of the wines in the Vinsent app haven’t been released (or physically shipped) yet, it could morph into a tradable futures market for wine… You could potentially buy a case of wine as a digital asset, and then sell it to another buyer at a different price before ever taking delivery – all while the case is safely stored inside the winemaker’s cellar.”

“Vinsent is a small bet on the big future of wine… The crypto token gives you full ownership over a provably scarce, provably authentic asset. And you don’t even need to hold it in your own hands.”

ERIC WADE, EDITOR, CRYPTO CAPITAL AT STANSBERRY RESEARCH

Wade goes on: “Consumers will soon live in a world where they’re faced with a choice on every purchase they make… They can either buy something that’s fully trackable and fully verifiable, or they can just buy something cheap from a guy standing on the nearest street corner.

“It just seems so obvious to me that the trackable version is much more desirable.

“That’s especially true if your job, your money, or your company’s bottom line is at stake… From fire extinguishers to replacement parts for airplane engines to car airbags, we could probably think of a million different examples for which only the authentic piece will do.

“A time will soon come when this technology is everywhere. It will do much more than help us verify the authenticity of wine or other goods that are essential to our daily lives.”

Would you like to learn more about how your business can use Laava Smart Fingerprints for traceability, trackability, counterfeit protection and more??Contact us?today or?sign up?for a free Laava Manage account.