Everledger will fight fraud in the Wine industry through Blockchain.
A London-based start-up is using Blockchain technology to address the problem of fraud and theft in the fine wine market.
Everledger has partnered with IBM to transform the way fine wines authenticate by replacing paper records with a tamper-proof digital ledger that follows each bottle through the supply chain and every time it passes through hands.
“In the fine wine industry there is a lot of fraud. People take an original bottle and refill it or fake new bottles. This is a threat to people’s sales and reputation. Collectors do not want to open a bottle to prove it’s real, so we have to find another way. Blockchain allows us to ensure the identity of an asset in a way we have not been able to before”, said Leoni Runge, wine director at Everledger.
Everledger uses blockchain technology developed in conjunction with IBM to capture more than 90 data points in each fine wine bottle. It stores this data on a label that is resistant to counterfeiting and can be attached to the capsule or bottle cap in each bottle. Data points include information about the glass, cork, capsule, label and glue used on the label.
The digital proof contained in the label is updated and travels with the wine every time it changes hands. The data is also stored in a chronologically ordered public database or blocking chain, housed in a distributed network of thousands of computers, where information can not be changed or deleted. At each stage of the trip, buyers or sellers can link to the “digital identity” of the bottle to authenticate it.
Rudy Kurniawan, the most famous of modern-day wine forgers, was jailed for 10 years for fraud by a US court in 2014 after buying large stocks of Burgundy and re-labeling them as more expensive wines such as Domaine Of La Romanee-Conti. This and other recent cases of fraud in the fine wine industry have exposed the vulnerabilities of the market when it comes to authenticating the origin of expensive wine. With the most expensive bottles passing hands for tens or even hundreds of thousands of pounds the stakes are high.
Leanne Kemp, founder and executive director of Everledger added: “We create a digital identity and chain of custody for each bottle,” “The capsule has a deactivation alert that can tell the system if it has been broken into.”
Everledger is working with Maureen Downey, a wine expert at Chai Consulting in California, and has certified and secured the wine in its vault.
Founded in April 2015 with the help of a technology start-up accelerator program from British lender Barclays, Everledger is not only working to prevent fraud in the wine industry but also in the diamond industry with a similar Certification system based on Blockchain. The company has offices in London, New York and Australia. Ms. Kemp said she hopes to expand her business into the fine art’s world.
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