Cheers! As the holidays near, there is much to celebrate. For one — just in time for the festivities — blockchain technology has found its way into the wine industry, starting with a single bottle of vino.
Blockchain technology startup Everledger recently announced last week that the intention of getting into the fine wine industry is to overhaul how provenance tracking is performed. Offered up was the example of how a 2001 Margaux bottle of wine was certified and secured on the Chai Wine Vault, with the help of fine wine expert Maureen Downey in addition to the new technology.
Experts say this is yet another way that the IoT and blockchain technology are quickly converging and working in tandem.
Anthem Blanchard, CEO of Anthem Vault, lauded the efforts, saying, “Providing a transparent chain of custody to track wine bottles should minimize counterfeiting and thereby increase confidence and activity in the collectible wine industry.”
Other experts agree but say it’s not just about a bottle of wine or two, or even a crate.
“[This] is another example of blockchain coming together with the IoT and supply chain management,” said Ashish Nangla, senior director at Synechron. “Through IoT data across the supply chain, digital information can be collected in real time as it never was before. This has several broad implications.”
Nangla offered that the enhanced asset provenance blockchain use cases like this bring three core special benefits. First is transparency in the asset supply chain. Second is a guarantee of asset transfer, namely delivery versus payment (DVP). Third is greater insurance claims processes.
“Blockchain is enabling companies to take supply chain management, asset transfer and insurance claims to the next level by feeding that data into a distributed ledger to authenticate identity,” said Nangla, who added that other insurance-related industries may benefit from the next technology if it is adopted soon. “Insurers are looking at other uses cases where identity of high-value assets must also be verified like fine art, diamonds and other luxury goods.”
He said that this is bigger than just authenticating a bottle of wine. In fact, this could indicate that the industry is one step closer to thinking how identity is assigned to assets. And, thus, Nangla said, “Identity is the next frontier for blockchain.”
But speaking of certain assets and luxury, let’s not stop at wine … diamonds could forever be blockchain’s new best friend.
Also tumbling out of Everledger is a new blockchain system to prove where diamonds came from, using a private blockchain to record information between sellers and buyers and a public one to provide a timestamp on those aforementioned private records. The sparkling new database was built on the Eris blockchain application platform but moved to IBM’s Bluemix cloud.
The concept will likely work well, according to experts, because as a diamond goes from a rough, uncut rock to one cut and laser-etched (with its own miniscule serial number), the benefits allow for stronger insurance, preventing fraud and avoiding trade issues — social and fiscal.
Blanchard at Anthem Vault added that there are also potential uses for “tracking authentication of the diamond as being natural versus synthetic.”
So indeed, avoiding a lot of those issues has sound benefits when it comes to those glimmering, expensive gems. According to the Coalition Against Insurance Fraud, insurance claims fraud has reached an estimated $80 billion a year.
“These startups are demonstrating the transformative potential of blockchain for insurance,” said Nangla. “For supply chain management and asset provenance, this is a critical step for authenticating identity and tying IoT data into a distributed database to enhance global supply chain management.”
As for the future of blockchain, it turns out the IBM has some big ideas, after it announced this month that it was getting into the game. The New York–based tech giant launched a blockchain ecosystem aimed at accelerating the creation of blockchain networks. In a press release, the company touted plans to transform the way all sorts of industries conduct business transactions.
That said, before that happens, IBM said a complete ecosystem of industrial players all working together is a must.
Blanchard at Anthem Vault said, “The key will be to see longer-term how IBM handles the burden of regulatory demands from hosting a variety of industries on its platform as part of its centralized blockchain.”
Nangla also pointed to the fact that many companies parted ways with the R3 consortium recently, which made apparent that blockchain collaboration would have to be through these abovementioned blockchain ecosystems, such as two to three parties coming together to work on shared use cases.
“Take our [Synechron] trade finance accelerator, for example; we’ve been working with banks, corporations, credit rating agencies like Dun & Bradstreet, shipping companies, etc., to bring together all the required parties in the ecosystem that need a single view of the same transaction and would benefit from straight through processing of the trade finance workflow,” said Nangla. “This is what IBM is now trying to do, realizing that not only will banks need to be on board to advance blockchain projects, but bringing together the entire ecosystem will be a critical step to prove the value of blockchain initiatives.”
So whether it’s wine, diamonds or the next big thing — namely an ecosystem — blockchain is making and leaving its mark in, yet again, a slew of industries.