BUSINESS
BLOCKCHAIN:
MAKING FINE WINE A LIQUID ASSET
With a decade of experience under its belt, blockchain is now This approach has three main problems however. Primarily, as it is
starting to emerge as a tool for a myriad of products and services. paper-based, it can be relatively simple to forge. Accurate figures are
While the blockchain was originally developed as a foundation for hard to come by because people don’t tend to want to admit when
cryptocurrencies, it’s clear that the system has a far wider utility. they’ve been taken for a ride, but there is little doubt that risk of fraud
is one of the reasons that investors shy-away from the fine-wine
Blockchain projects are now being used to remove bureaucracy and industry.
friction from a range of products and services around the world, from The second problem is that paper-based trading is exceptionally
insurance to automotive and even fine wine. One of the reasons for slow. For a passion project like wine, this can be seen as less of a
this is that unlike a traditional ledger, blockchain has the flexibility to problem: people are often willing to accept slow trades because
record value in a variety of ways. the pleasure is in the ownership. The downside though is that this
reduces potential investors to a specific demographic, constraining
For the fine wine industry, placing a value on a bottle of fine wine is market liquidity. Finally, a paper-based market is opaque, making
more complicated than most products. There are several relatively participation difficult unless you are willing to pay significant broker
simple factors that need to be looked at, for example where the wine fees. Again, liquidity suffers.
was produced, the weather in the year that the grapes grew and how
old the vines were when they produced the specific vintage. These Moving to a blockchain-based system removes these hurdles.
factors can all be examined, tracked and quantified, and if a chateaux Blockchains are very difficult to tamper with, enable far more
produces 1,000 bottles of wine in a specific year, the value of those efficient trading than is possible in a paper-based system, and
bottles will initially be consistent. offer transparent, comprehensive provenance that can take all of
the nuances of both vintage and history into account. Taking the
Where fine wine differs, is that as a wine ages, how it has been looked blockchain into the fine wine industry will make fine wine a far more
after becomes more and more important. And the only way to test if liquid asset.
a wine is still good is to open it. Which is not something you can do
twice.
Tommy Nordam Jensen, CEO and founder at WiV, a secure,
blockchain-based fine wine valuing system that brings together
As a result, the fine wine industry, which has existed in varying forms
producers, buyers and sellers.
for more than two thousand years, has developed a comprehensive
system of provenance. This is a comprehensive paper-based system For further details, follow them on @WiVteam or subscribe to
that verifies the value of a bottle or case of wine based on a defined updates at www.wiv.io
set of factors.
96
The Art of Luxury
Issue 38 2019