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Blockchain extends its reach to eradicate fake wines and spirits

For wine collectors, origin is everything. Since up to 20% of all wines that circulate around the world It is considered wrong, it is not surprising. In earlier times, recognizing a fake Burgundy required a good nose and an eye for details. Thanks to blockchain technology, the problem is now solved from the root, or should it be from the vineyard?

Sommeliers, winegrowers, collectors and other connoisseurs of red matter make every effort to determine the authenticity. Since the weight of the bottle in relation to the anomalies observed in the year of production, the inspection of the bottle glass, the sealing of the cork and the adhesive of the label; The smallest discrepancy can be the largest red flag. But somehow thousands of bottles every year fake wine Slide the net down.

This is because counterfeiters also make great efforts. It’s not an easy task to make a new burgundy bottle disguised as a 60 year old. It’s also not always about the aesthetics of the bottle; The taste is just as important, if not more. Fraudsters are known When you recreate every note with a hybrid wine blend that mimics the taste of an original, you’re like modern alchemists who create gold.

Blockchain extends its reach to eradicate fake wines and spirits
Blockchain extends its reach to eradicate fake wines and spirits

Because for some Gold is essentially what good wine is, and what fakes can become. For the past 16 years Burgundy 150, an index showing the prices of the most popular plants, has increased by almost 450%.

Several popular wine indices are shown side by side

A climatic revival of the good wine took place between 2016 and 2018, given the uncertainty surrounding the Brexit presidency and Donald Trump. which caused some experts to speculate about it Investors used wine at that time as a store of value, no different from gold. The parallels between wine and gold do not end here. As a Asset class, good wines, are similar to precious metalthey are extreme short, every time tighter, Everyone decides that his bottle The $ 300,000 Cheval Blanc of 1947 is ready to be consumed.

Others did the analogy, maybe a A little more cynical is that vintage wines are more like the tech boom of the 2000s, where a “.com” suffix could add an extra set of zeros to the company. Also a vintage label from, Hermitage, attached to any old Plonk bottle, can cost more than $ 10,000. Effectively, This happens all too often in the wine industry.

Fight counterfeiters

While actual estimates are sparse for obvious reasons, It is believed that these are fake wines a multi-million dollar problem. Sour Grapes, a 2016 documentary, reports on the dramatic rise and fall of the productive fraudster of fake wines, Rudy Kurniawan, who has contributed significantly to the creation of the fake wine market, and its high prices. But while it is a remarkable case, it is only one of many on a big fake racket.

And that’s not just limited to good wine. A 2018 report from the European Union’s Intellectual Property Office, In Europe alone, counterfeiting of wines and spirits means that around EUR 2.7 billion (USD 3 billion) is lost annually.

The illegal liquor market may be a serious problem, with health complications and deaths from fake gins, vodkas and whiskeys mixed with battery acid and even methanol, a toxic chemical used in antifreeze. Attempts to deal with alcohol fraud were not without foundation.

Talk to Cointelegraph Marton Ven, Marketing Director of TE-Food, a company that provides solutions for traceability of food from the farm to the table, He explained that the molecular analysis of spirits through a system known as Raman spectroscopy can reveal a fake fleet. However, Ven added the limitation that the implementation of this process is on a broader scale it would be expensive and inefficient. The same thing happens with Centralized databases that are already used to track wine. Because of the problems inherent in centralized databases, The scope of corruption and subversion is relatively broad.

A modern solution to an old problem

Fortunately, the blockchain review may have eliminated the fake wine problem forever. In the blockchain ecosystem, the latest product from Nem, symbol, is a blockchain solution to fight fraud, especially in the area of ​​fine wines. The icon checks and tracks a large number of transactions per second. which allows Track raw materials and their end products efficiently. Since the grape, the bottle and the journey to the final destination, everything that is tracked The symbol is registered in an immutable blockchain that guarantees the authenticity of each level.

One-way smart contracts ensure data protection and require confirmation of authenticity before payment is released. This is an incentive for intermediaries in the supply chain to independently verify authenticity. The approach can be extended in a similar way between retailers and customers, Closing the remaining gaps in the supply chain.

Dave Hodgson, direct director of Nem Ventures, Cointelegraph said that at Take notes about the route or product information. Tracking of wine bottles, boxes, crates or pallets; Serial number tracking; and so on, the wine becomes practically tamper-proof. However after Hodgson, Symbol’s reach could be further deepened. literally:

“It is also possible to go deeper into this topic (most likely for higher quality spirits) to have an IoT sensor in the tracking solution to record things like temperature, humidity or GPS position of boxes / bins. Plus, IoT could Sensors in the soil to measure pH, chemicals, pesticide use and ripeness. “

Symbol is not the first to use blockchain for wine verification. In fact, there are a variety of blockchain-based solutions on the market, each of which offers slight variations from the last one. A solution from blockchain startup WeCan takes wine verification beyond the supply chain and extends it to private auctions and buyers.

Similar to Symbol, WeCan records all facets of information about the wine, from the manufacturer to the original winemaker to its previous owners, and links them to its blockchain. A scannable QR code makes the data available. They even go so far as to show the purchase and price development in detail. Camille Ernoult, Head of Marketing and Communication at WeCan said to Cointelegraph:

“Alcohol fraud is a real problem in the industry as more than 20% of the bottles sold are counterfeited. Blockchain could help in this matter by tracing the entire value chain from production to sale. This would mean that everyone in the Chain should enter the information that is immutable, timestamped, and securely registered on a blockchain platform. “

Even one of the four major accounting firms Ernst Young, he started the game of Verification with blockchain. The wine platform, tattoo, that delivers directly Hotels, restaurants and cafes, sells wines straight from the vineyard, without Interference with the private market. Every bottle is “tattooed” (hence her name) with her own QR code, what details data like la variety of grapes, the types of fertilizers used in crops, and even the delivery logistics.

Go one step further Tattoo combines traceability with tokenization. Buyers can buy and sellers can connect their products to the platform using tokens based on Ethereum’s ERC 721 token standard.

Blockchain cannot block everyone

While these solutions You can address the problem of counterfeiting between retailers and retailers. There are few ways to stop refilling once it reaches the private market. According to Ernoult, there is almost nothing that blockchain can do in this regard. “A missing piece of the puzzle for the blockchain when using alcohol screening is another actor to secure the bottle and make sure it hasn’t been opened and replaced with anything else.” said.

Ven is pragmatic and points out No tracking system is flawless. “I don’t know of a security system that can’t be undermined,” he explained. The goal of blockchain-based traceability It is said to make adulteration more difficult and costly so that it is less profitable and ultimately not worth the risk.

Similarly, although it admits This blockchain is not a panacea against counterfeitersNems Hodgson suggests that the review at least alleviate the problem: “There will always be ways to undermine verification systems. While blockchain is not a panacea for alcohol fraud, it dramatically reduces the likelihood of this happening.”

However, Alastair Johnson, founder and CEO of Nuggets, a self-confident payment and identification platform, suggested an alternative: An obligatory customer-oriented app that was introduced in private purchasing, a phase in which the most counterfeit bottle refill process is unlikely to be hindered. Johnson said:

“Through verified identities set for blockchain-bound merchants, brokers, and consumers, as well as non-consumable tokens, you can get an immutable proof of origin, not only at the time of purchase, but also at the time of the purchase could be demonstrated at the time of discovery. “

With a customer ID verified by KYC and the immutable general ledger in the blockchain, the counterfeiter not only risks being caught, but subsequent resellers can damage his reputation. Unfortunately, blockchain didn’t exist around 8,000 years ago when it was believed that wine was made for the first time.. If I had, maybe The counterfeiting problem would never have occurred. Still with Given the increasing modern practices and the increasing use of blockchain verification techniques, there remains hope that the number of falsified numbers will decrease.

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