Emerging technology firm Everledger is the first organisation to secure a bottle of wine’s provenance on the Blockchain.
The bottle, a 2001 Margaux, was certified and secured on the Chai Wine Vault – a joint solution introduced by Everledger and world-renowned fine wine expert Maureen Downey to transform provenance tracking in the fine wine industry.
“We hear daily from our industry partners on the threat fraudulent bottles pose to sales, trust and most importantly reputation,” says Leoni Runge, Everledger’s Head of Fine Wine. “Blockchain enables us to secure the identity of an asset in a way we haven’t been able to before. For the fine wine industry this means the opportunity to add a layer of transparency to every stage of a bottle’s journey across the supply chain.”
“We’re starting to see the industry waking up to the impact of counterfeits in market but to date there hasn’t been a solution that could adequately verify a wine’s provenance,” added Downey. “Wine certified on the Chai Wine Vault has a guarantee of authenticity, ensures buyer confidence, and protects the future value of wine assets for centuries to come.”
The Chai Wine Vault issues certification to bottles authenticated through Maureen Downey’s Chai Method (TCM) where 90+ data points are collected, in addition to high-resolution photography and records of a bottle’s ownership and storage. Everledger takes all this information and creates a permanent, digital incarnation of the bottle that is written permanently into the Blockchain.
This digital proof travels with the wine as it moves between different stakeholders in the supply chain, with ownership and storage records updated as the bottle changes hands. Licensed retailers, warehouses, auction houses and other sale platforms can link to the bottle’s digital identity to verify provenance resulting in an increase of an asset’s value for years to come.
Built on the Linux Foundation Hyperledger Fabric, The Chai Wine Vault is authenticated and secured by IBM Blockchain that helps bring transparency, security and efficiency to transactions in a permissioned environment.
“Global trade fraud costs billions of dollars each year in lost revenue due to malicious activity or human record-keeping errors,” said Donna Dillenberger, IBM Fellow. “Our work with Blockchain shows the potential to dramatically reduce these losses by ingraining transparency and security in the system from the ground up. Working with Everledger in tracing the provenance of diamonds, and now wine, shows how the application of this technology can fundamentally change the way consumer goods are exchanged.”
A proven leader in the diamond industry, Everledger’s focus for the past year has been on securing the provenance of diamonds on the Blockchain with 1,000,000 stones currently encrypted.
While a diamond’s provenance is threatened by conflict stones and the tampering of certificates, the wine industry shares the same need to protect a bottle’s identity and provenance in a secure and transparent way. In the fine wine industry where an estimated 20% of international sales are from counterfeit wine, problems with document tampering and fraudulent activity continue to affect the supply chain pipeline from grape to glass.
Until today, authenticators could only identify a counterfeit and were unable to certify an authentic bottle. Certification wasn’t possible given the risk of document tampering and the inability for the certificate to stay connected with the bottle of wine as it changes ownership and location.
Providing a single version of the truth for industry at every stage of a bottle’s lifetime journey, The Chai Wine Vault is part of Everledger’s continued commitment to work with industries where provenance matters to bring transparency to global trade.
Wine is a Valuable but Fragile Asset
- Fine Wine is a proven valuable asset which, when purchased correctly will increase in value over time.
- As a “perishable asset,” Fine Wine is an excellent way to share wealth from generation-to-generation.
- The market is infiltrated with counterfeit bottles, and more are being made and put into markets every day.
- Counterfeit bottles are almost always accompanied by counterfeit provenance stories to substantiate them. Many times, the provenance stories are believed and the counterfeits are sold, even by reputable merchants.
- Currently, bottles that are authenticated are more valuable in the short term, but must be re-authenticated every time they are traded.
- Collectors that have purchased fine and rare wines in the last 15-20 years need to have their bottles authenticated to ensure they are not sitting on valueless investments.
- Wine is alive, and fragile. Quality and longevity are directly affected by a bottle’s unique transit and storage history. Thus, provenance is just as important as authenticity.
- Authentic bottles with provable provenance are worth 20-40% more than equivalent bottles without the same known provenance, as evidence by the results of ex-chateau, and importer sales at auction.
- While many producers have made great efforts to put technology in their packaging, many of those technologies are being worked around, and will be used to substantiate counterfeits in the future.
- The only way to ensure the protection of wine assets is a solution that will address both authenticity and provenance, that is complex, and layered, cannot be physically duplicated with improved technology and which is incorruptible and timeless: Chai Wine Vault by Everledger.
- Fine Wine Bottles authenticated and certified in the incorruptible Blockchain based database, Chai Wine Vault by Everledger are, and will become, more valuable for decades, and generations to come.
Counterfeit Wine: The Sad State of the Fine Wine Market
There is no way to accurately state the dollar amount of counterfeit wine circulating in the world’s fine wine markets today. But there is evidence that it could easily represent over US$1billion circulating in current markets. Between 2002-2012, Kurniawan created and sold over US$150million in counterfeit wine. That represents over US$550million of current market value in global wine markets, and almost all of those bottles are still in collections, or are still being returned and resold. And he is just one known counterfeiter.
Opportunists in Europe, Asia and the USA have viewed the very lucrative outcome of making and selling counterfeit wines, recognized the low risk involved due to few prosecutions, and have taken up the trade. This has spawned a new wave of counterfeiters who are flooding the markets. This is not about clearing the Kurniawan, Rodenstock and bottles from other already known counterfeiters, we also have new counterfeiter’s bottles being discovered all the time. In fact, a top wine expert in Hong Kong who advises collectors, in response to the news of the Oct 7, 2016 arrest in Marseille, of fraudsters selling counterfeit Dugat-Py, Roumier and Rouget Burgundy wines, responded in an email:
“I suspect this is the tip of the iceberg. The volume of suspect wines I am seeing coming out of Europe is at Rudy Kurniawan levels.”
Unfortunately, many counterfeit wines pulled out of circulation and returned to the vendor because of inauthenticity for a refund, are simply resold as authentic by those vendors to the next unsuspecting buyer.
Wine Fraud, and counterfeit wines have become a costly, endemic problem that affects all buyers and vendors of fine wine in the global marketplace. Counterfeits cost people money, jobs and livelihoods.
- Counterfeit wine accounts for some 20% of international sales. Source: Sud Ouest
- According to the International Center for Alcohol Policies, 30% of all alcohol that is consumed is fake. Source: Wine-Searcher.com
- More than 50% of Chateau Lafite sold in China is fake. Source: Xinshi Li, President of the Chinese Academy of Inspection and Quarantine
- 7000 cases of fake Lafite, Mouton, Latour and other well-known Bordeaux wines retailing for a total of 32 million dollars were found in a single 2013 raid in China. Source: the Cellar Insider
- 75% of Canadian Ice Wine sold in Asia is fake. Source: Rhys Pender, MW
- The value of just one convicted counterfeiter, Rudy Kurniawan’s counterfeit bottles in the market today is over $550mill, and those bottles are all still being circulated. Source: Maureen Downey
- On average, over 2 wine crimes involving wine fraud or theft happen each week. Source: WineFraud.com
Chai Wine Vault by Everledger: Finally THE Solution to an Age old Problem
Until today the only formal reporting an authenticator of fine and rare wine could prove beyond a shadow of a doubt was a counterfeit. In the hands of an experienced authenticator a fake bottle of 1982 Petrus – and in fact there are more fake bottles of this famed wine circulating than real bottles ever produced by the Chateau; can be spotted, and positively identified as a phony. But being able to certify that a bottle is “authentic” is a much more difficult challenge. The moment the authenticator and the wine part, the condition of the bottle is subject to change. It could be sold to another owner, consumed, refilled or altered in any number of ways. In other words, authentication until now, could not be proven past the moment of the authentication.
Today with the announcement of the Chai Wine Vault by Everledger, there is finally a way to prove the positive.
Wine authenticated through The Chai Method (TCM) is certified on the Blockchain, creating a permanent, digital record of provenance that can be accessed throughout a bottle’s lifetime journey. Maureen Downey, owner/founder of Chai Consulting LLC, a world renowned authenticator of fine and rare wine, searched for years for this solution.
“Wine certified on the Chai Wine Vault has a guarantee of authenticity, ensures buyer confidence and protects the future investment value of wine assets for centuries to come.”
Consumers and buyers of fine and rare wine now have a complete solution to ensure the provenance of every bottle of wine they buy or sell.
Everledger is a trusted, global ledger used to track and verify the provenance of valuable items. A proven leader in the diamond industry with 1,000,000 stones currently secured on the Blockchain, Everledger is now extending the platform’s technology to create a digital wine vault to solve the problem of counterfeit bottles in the fine wine industry.
Leanne Kemp of Everledger
Leanne Kemp is the founder & CEO of Everledger – a digital, global ledger that tracks and protects diamonds and other valuable items on their lifetime journey.
With a wealth of successful startup companies under her belt, Leanne is pushing boundaries in protecting the global market of diamonds and luxury goods.
Using her extensive background in emerging technologies, business, jewellery and insurance – Leanne and Everledger are working towards ensuring global transparency by constructing a digital verification system that assists in the reduction of fraud, black markets and trafficking.
Everledger is leading the market in real world application of Blockchain technology with a set of industry awards including the Meffy Award 2015 for Innovation in FinTech, FinTech Finals 2016 for Best in Show, European Financial Tech Awards 2016 for Best Blockchain Company, Asia Insurance Technology Awards 2016 for Best Newcomer and Penrose Award for Innovator of the Year.
Note from Maureen Downey:
Since getting involved with culling counterfeits from the market in 2000, I have heard many ideas on fighting this blight. I have seen several laughable efforts as well as many great, but unfortunately unsatisfactory solutions to solving the counterfeit bottle fraud on the global markets.
As time has progressed, so have the sophistication of the counterfeits, and so have the outcries from collectors, producers, and reputable vendors for a solution to certify bottles they deal with as authentic and from trusted provenance.
To date no technology nor single solution has been successful. And authentication is only a solution that is useful for more than a single transaction. Each time a bottle is traded, it is represented as a new entity: it is inspected as a new entity and questioned as such, as it should be – because there is no immutable, incorruptible database where information about that bottles exists. And it could after all, have been altered, emptied with a coravin or a skillful ahso user, and refilled with 2002 Liberty Bay Cellars Merlot. (Rudy Kurniawan’s base wine for old Pomerol!)
At every turn, I have been underwhelmed by the technologies available as they either fail with time, like prooftags that peel off with a few years in a humid cellar, or they will simply be fodder for substantiating counterfeits of the future, as will the myriad of RFID solutions – all of which will be easily counterfeited in the years to come when we need the authentication the most. It has been very frustrating.
- A2B Direct to Launch a Blockchain Platform and Hold an ICO - June 24, 2017
- The ‘under the radar’ ICO, Populous. A platform tackling the Multi-Trillion Dollar international billings industry. - June 23, 2017
- Blockchain Startup TrueFlip Reinvents Business with 600 Year Long History of Fails - June 23, 2017
- EXMO exchange lists WAVES Blockchain Project - June 23, 2017
- Blockchain Startup DECENT Launch Date Announced - June 23, 2017
- Adex, A Decentralized Ad Network, Taps WINGS Platform For Community Engagement, Token Sale Value Discovery And Social Promotion - June 23, 2017
- Comcast’s Advanced Advertising Group And Participants Announce Blockchain-based Technology Platform - June 22, 2017
- Online Platform for Gamers to Release a Cryptocurrency for In-game Skins Trading; Launches an ICO - June 22, 2017
- Colu Launches Digital “Local Pound, East London” Currency to Empower Local Economies - June 21, 2017
- bitJob.io is Building a Student Employment Program on the Ethereum Blockchain – Launching ICO - June 21, 2017
- Blockchain Project Waves launches landmark USD gateway - June 21, 2017
- Status.im Raises $270m in Three Hours – Shattering Token Raise Record - June 21, 2017
- World’s First Mobile Data Exchange DENT Seeks to Disrupt Telco Market with Blockchain - June 20, 2017
- Financial Inclusion Company Everex Takes Home RemTECH Award For Ethereum Apps - June 18, 2017
- SONM Raises $42 Million in Token Raise - June 18, 2017
- WISeKey partners with the Blockchain Interface company RIDDLE&CODE to develop innovative solutions for securing IoT via Blockchain technology and crypto-hardware - June 17, 2017
- Bancor Announces $153 Million Raise, Largest Token Generation Event in History - June 17, 2017
- CORION Announces Final Coin Sale Details to Build its Revolutionary Platform & Stable-Rate Currency - June 17, 2017
- Enhancing the value of history with ZenDao – ICO announcement - June 16, 2017
- FunFair Announces Token Creation Event on June 22 for World’s Fastest Blockchain Casino Platform - June 15, 2017
- Blockchain Technology Venture Nimiq Announces Token Sale - June 14, 2017
- Outlier Ventures Makes Multi-Million Dollar Investment in Distributed IoT Marketplace ‘IOTA’ Through Major Token Purchase - June 14, 2017
- Bancor Token Allocation Event Smashes Record – Raises over $150 Million - June 13, 2017
- Consensys Introduces Omega One - June 12, 2017
- MetaX and DMA Join Forces to Launch adChain: a Blockchain Solution to Digital Advertising Fraud - June 12, 2017
- Aeternity Raises $24 million Over Phase Two of Token Sale - June 12, 2017
- HyperChain Capital announces Collaboration and Investment in CoinDash - June 12, 2017
- Community-Driven Cryptocurrency Credits Announces First Public Release - June 12, 2017
- Bancor Protocol Foundation Announces New Partners Before Upcoming Token Allocation Event - June 12, 2017
- Investors from Russia are launching a venture fund formed on blockchain - June 12, 2017
- Bancor Adds Heavyweight Advisory Team to their Foundation – Token Allocation Event Kicks off Today - June 12, 2017
- Bancor Protocol Foundation Adds Author and Euro Designer Bernard Lietaer as Chief Monetary Architect - June 10, 2017
- Russian Billionaire Announces Business Incubator on Waves Platform - June 9, 2017
- Bancor Launches Crowdfunding Valuation And Promotion Via Wings Dao On Ethereum - June 9, 2017
- Coinsilium invests in Indorse.io Decentralised Professional Network - June 8, 2017
- Cofound.it Breaks Pre-Sale Record, Selling Out With Priority Pass Before Public Token Sale - June 7, 2017
- Cofound.it Token Pre-Sale Reaches $5 Million Threshold Within Three Hours, Announces First Three Projects - June 5, 2017
- Blockchain Startup DECENT Testnet #2 Launched! - June 4, 2017
- Blockchain Challenge Dubai Announces Winners- Awarded $45,000 - June 4, 2017
- Waves Ceo Sasha Ivanov: Blockchain Will Lead To Rapid Progress Not Only In State Administration, But Also In Business - June 4, 2017
- Exscudo ICO Successfully Concluded – $5M Dollars Raised - June 1, 2017
- Aventus launches Ethereum-based Event Ticketing Solution - June 1, 2017
- Brave Token Sale Blasts Records With $35 Million in 30 Seconds - June 1, 2017
- Japanese Blockchain Startup releases VALU – Social Media Value That Can Be Traded - May 31, 2017
- MetaX and ConsenSys Announce adToken Sale June 26, 2017 - May 31, 2017
- Blockchain Indy Production Start Up to make a TV Series about the Bitcoin Revolution. Fans invest to help tell the story! - May 31, 2017
- Chat Platform Kik to Integrate Kin Token as First Mainstream Adoption of Cryptocurrency - May 31, 2017
- VPN Blockchain Startup Mysterium Network Raises 68,629 ETH ($14,358,975 USD) in under 45 minutes - May 30, 2017
- XinFin Introduces Blockchain-based Institutional Financing Marketplace Alongside Pre-ICO Token Sale - May 30, 2017
- European Energy Companies to Test Peer-to-Peer Trading Over The Blockchain - May 30, 2017