Can block chain solve the problem of wine counterfeiting, at least for future vintages?

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J a y H a c k
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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#1 Post by J a y H a c k »

That was suggested in the Rudy thread. I think the answer is No, because wine in a bottle is a physical commodity that can be transferred without reference to what the block says, in contrast to Bitcoin and, let's say, street name non-paper stock certificates, where the block chain is the manifestation of the item itself. However, I am willing to listen to and consider arguments on the other side that it can work. Would anyone like to make the argument?

Please note that I have posed the question for future vintages only. I think it cannot possibly work for existing wine (save perhaps ex chateau bottles never before sold) because there would be no baseline to start the chain.
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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#2 Post by Maureen Downey »

ABSOLUTELY!

That is why 2.5 years ago I partnered with the leader in both proving authenticity and provenance of diamonds - as well as being a leader in using blockchain technology for logistics and supply chain tracking Everledger, to create the Chai Vault. Everledger was a force behind the new eBay Authenticate platform. They can track diamonds from dirt to finger, and food from dirt to table.

We are already loading in authenticated secondary market wines as well as wines of provable direct provenance. This info will be visible to potential buyers to make more risk adverse, informed purchase decisions - because that is where anti-fraud matters. I am training authenticators all over the world to be able to do secondary market authentication, and have retailers (all in europe so far) using, or interested, in the platform to provide a better, more transparent buying opportunity for their clients. Chai Vault certification also adds value by having an authenticated product which will remain authenticated for insurance uses, or in the event of resale by them, or future generations.

Soon we will be using the technology at production - so the provenance can go all the way to the producer.

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#3 Post by J a y H a c k »

After reviewing Maureen's answer, with which I have no disagreement except as to the 1000% certainty of the verification process for wines already in circulation, I guess I asked the question incorrectly. What I should have asked is . . . Assuming that a winery wants to guaranty that its wines are not counterfeited once they get into circulation, can the winery adopt a block chain system to accomplish the result. I think the answer is "NO" because every owner of the wine would have to agree to cooperate with the block chain and would have to agree not to transfer physical ownership of the wine without also transferring the ownership token on the block chain. You can't transfer Bitcoin without engaging the Blockchain but you can transfer a bottle of wine without transferring the related token. I can't figure out a way around that.
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#4 Post by JIMCOH »

Jay, I see your dilemma and agree that the only way I can see to insure the commodity is still verifiable in the block chain is if it remains virtual and secure and physical possession does not transfer until the current owner says I want to consume it. Then it would be removed from the security "container." I don't see another answer, either.
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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#5 Post by Alan Rath »

You could still have a verifiable chain of possession for those bottles for which every transaction is properly recorded. It would just eliminate bottles that, for whatever reason, loop out of the chain - which is kind of the point. Any bottle that doesn't have 100% tracing of provenance becomes worth a lot less.
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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#6 Post by J a y H a c k »

Alan Rath wrote:You could still have a verifiable chain of possession for those bottles for which every transaction is properly recorded. It would just eliminate bottles that, for whatever reason, loop out of the chain - which is kind of the point. Any bottle that doesn't have 100% tracing of provenance becomes worth a lot less.
Except I buy a verifiable case of wine subject to the block chain. I then counterfeit 12 bottles and sell them as the originals, using the block chain. You can't tell whether the bottles I sell you are the same as the bottles in the block chain. I now have the money and 12 bottles to drink.
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#7 Post by JIMCOH »

Alan, how do you verify bottles that are not stored in a secure facility. If the bottle leaves the secure facility, there is no traceability. 100% tracing of provenance requires, really requires security. Transactions mean nothing if the item isn't secured.

To have a verifiable chain of possession would require extreme security. It would need to be locked away, under a continuous monitoring camera, or with a traceable coded bottle RFID tag that would need to remain in contact with the reader.

To say that I bought a verified bottle and the record transferred it to me is fine. Now I sell the bottle to you and the record is transferred to you, but what physical bottle did I give to you, and how do you verify that it is the same one that I purchased? You can't.
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#8 Post by Dale Bowers »

In a word, no.
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#9 Post by Lee B e c k e t t »

I can envision a scenario where the token rides with the bottle. You etch a QR of the public key onto a protected area of the bottle such as the punt, then place the private key on a small chip on the interior of the bottle at the base of the cork in a hermetically-sealed bidule similar to what's on a champagne crown cap. The chip could be RFID powered, or powered through magnetic coupling, and it would hash the verification to be checked on the blockchain. Remove the cork and the chip is destroyed, destroying the private key.

Given a couple bottles of wine and some lively conversation, I'm sure the crowd here can come up with some good ideas.

Existing bottles would need a trusted third party similar to what Maureen is providing, if I understand it correctly.

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#10 Post by Dale Bowers »

Lee B e c k e t t wrote:I can envision a scenario where the token rides with the bottle. You etch a QR of the public key onto a protected area of the bottle such as the punt, then place the private key on a small chip on the interior of the bottle at the base of the cork in a hermetically-sealed bidule similar to what's on a champagne crown cap. The chip could be RFID powered, or powered through magnetic coupling, and it would hash the verification to be checked on the blockchain. Remove the cork and the chip is destroyed, destroying the private key.

Given a couple bottles of wine and some lively conversation, I'm sure the crowd here can come up with some good ideas.

Existing bottles would need a trusted third party similar to what Maureen is providing, if I understand it correctly.
With if said bottled is Coravined avoiding your chip and refilled?
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#11 Post by Lee B e c k e t t »

I think it would be difficult to prevent with a natural cork, but a synthetic cork could be designed that would prevent a Coravin insertion. An insertion that would destroy the RFID coupling antenna is probably the better bet to implement on both types of corks. A twist off cork might work, but the metal might interfere with the power transfer for a chip.

By the way, I'm not saying any of this is cost effective to implement.

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#12 Post by Alan Rath »

JIMCOH wrote:Alan, how do you verify bottles that are not stored in a secure facility. If the bottle leaves the secure facility, there is no traceability. 100% tracing of provenance requires, really requires security. Transactions mean nothing if the item isn't secured.

To have a verifiable chain of possession would require extreme security. It would need to be locked away, under a continuous monitoring camera, or with a traceable coded bottle RFID tag that would need to remain in contact with the reader.

To say that I bought a verified bottle and the record transferred it to me is fine. Now I sell the bottle to you and the record is transferred to you, but what physical bottle did I give to you, and how do you verify that it is the same one that I purchased? You can't.
All true. I guess if you want to drink the wine, and are devious enough to repackage that bottle in way that is undetectable, that can't be stopped. But that doesn't seem like a very efficient model for counterfeiters to be using.

Really, I don't much care about any of this, because a) I don't buy or drink wines that are likely to be counterfeited, and b) I think it's a little crazy that such wines exist at all.

But if I did care, I would be focusing not on block chain (which, frankly, I find to be the latest cool buzz word people like to throw around, and think is some kind of salvation); I'd be focusing on doing things to a bottle that make it impossible to counterfeit, and easy enough to validate.
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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#13 Post by Maureen Downey »

J a y H a c k wrote:
Alan Rath wrote:You could still have a verifiable chain of possession for those bottles for which every transaction is properly recorded. It would just eliminate bottles that, for whatever reason, loop out of the chain - which is kind of the point. Any bottle that doesn't have 100% tracing of provenance becomes worth a lot less.
Except I buy a verifiable case of wine subject to the block chain. I then counterfeit 12 bottles and sell them as the originals, using the block chain. You can't tell whether the bottles I sell you are the same as the bottles in the block chain. I now have the money and 12 bottles to drink.
Um - Of course we can can tell if the bottles presented are not the same as those certified in the blockchain: That is kind of the whole point.

Chai Vault Certification occurs on the bottle level. We join the ledgers of individual bottles to form cases and connect those together, and to their packaging. Individual bottle ledgers are joined to make the case at production, or in direct provenance with paperwork from the producer/negociant. (no exceptions - we don't care how "trustworthy" anyone thinks they are - this is about relying on docs and data, no more opaque "trust"!) If it's not direct from the producer with paperwork, or it does come from the producer as a case - you cannot prove it was a case. By joining the bottles (and the exact wood) at production, in the future you will know you are not purchasing some "Frankenstein-ed case" which is what happens now the VAST majority of the time today, all over the world.

In the user portal online, the owner screens include many views, including one with individual bottle certificates combined as part of a "case" be that 2, 3, 6, or 12 bottles and if there is an OWC attached to the case.

You simply cannot counterfeit bottles that have been certified and loaded into the blockchain; you cannot recreate them, and you cannot empty and refill them. In either case, the bottle will not match the blockchain ledger, no matter how good you are - the AI, tech and strength of the unique "bottle thumbprint" are better.

So when you present your counterfeit case to someone to sell it, when they verify the bottles (and the OWC if applicable) so they can use that data to market the case and demonstrate BOTH authenticity and provenance information to potential buyers - the bottles will not attach to a blockchain ledger. Then the seller cannot place the links/URLs online connecting to the individual bottle's/ or case's ledger which displays the online Certificate of Authenticity and Provenance. All the data about the provenance, how, when, where and whom the bottle was authenticated, and all the condition reports about the bottle - will not be accessible if a bottle is pretending to be something it is not. Similarly, if you have reassembled a case of similar bottles that were not originally sold together - the bottles individual ledger's will not link, and that will tell that story too- but you will be able to see the authenticity and provenance info on the individual bottles.

You cannot counterfeit these. You wont get into a ledger using counterfeits. even if you could - the bottle will not match the unique "thumbprint": on the ledger which is more than a just chip. The whole point is to display the ledger for stronger sales by the seller as buyers will be able to make more informed, sound and authentic purchases. So this fraud will be discovered BEFORE you can victimize someone. Everybody wins.
(The applications we will be able to integrate for inventory management with the different chips we use will be revolutionary for producers, vendors and collectors. The tech is off the charts! But I digress.)

Yes the Chai Vault has tackled the Coravin issue. Done and done.

Yes, to use the Chai Vault, the seller will have to be have to either be a licensed user, or hire a licensed Authenticator to verify bottle info from the Chai Vault, and upload data for sale and after the sale, including the change of ownership to the new buyer.... (We have found it remarkably easy to tie the tech to most existing, modern, retail POS/inventory systems - so it is not a feat to bring it live for a retailer - as long as they are licensed or have one of our people come in and verify bottles.)

Yes, ownership can be encrypted, but the name of the authentication, the vendor, dates, condition reports and provenance data will never be encrypted.

And yes - we are looking at addressing temperature issues. Right now the best battery is about 10 years, and is the size of a credit card. That is something that we will want to be putting into packaging - sooner than later. Most bottles need to be inspectd more than every 10 years.... There will be alerts set to inform people when it is time to change out.

This is something thought through by my team and me, and the people that dominate the global diamond trade and logistics of meant and product to computer parts to Chanel perfume and bags. The implications for insurance and buyers in revolutionary - and we are already logging bottles in.

Blockchain certification of bottles of wine and spirits in the Chai Vault is the solution to combating counterfeits and provenance issues: After all, one is moot without the other.

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#14 Post by Marc Breitenmoser »

[thumbs-up.gif] Sounds fantastic!
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#15 Post by David Glasser »

That's great Maureen. It still depends on a trained human to detect the type of swap Jay suggested, and that costs money above and beyond the cost of maintaining the blockchain ledger.

How much money will influence the price point at which it becomes cost efficient to use the technology. So it may be effective for pricier wines but it wont eliminate all counterfeits.

And over time there may be less costly competitors entering the market who may not be as good at the human part. Which can add uncertainty back into the system.

This is not a criticism of what you are doing. I think it's fantastic. But it's not practically applicable to all wines.

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#16 Post by R_Gilbane »

So what happens if ownership is encrypted and the owner either forgets the encryption code (senility strikes!!!) or dies?
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#17 Post by GregT »

But why would you need blockchain? You can use a chip, put it in the capsule, and it will tell you if the capsule was removed or the cork removed. And it can contain a chemical analysis of the wine, maybe an x-ray analysis, etc. Maybe we can't determine yet what would differentiate one wine from another, but if the concept of terroir is valid, certainly the wine from St. Emilion must be different from the wine from Seralunga. We have chips for dogs, why not wine? If a bottle has been opened, it's fraudulent, unless opened at the facilities of the producer and re-corked there. It would eliminate the requirement for visual inspection of the bottle.
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#18 Post by scott c »

There seem to be at least a couple others attempting to do this, but they rely on QR codes on the bottles:

[youtube]d3QGvjPYFAw[/youtube]

[youtube]YX36OQPKUSg[/youtube]
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#19 Post by JulianD »

There are a couple of projects similar to this in the works but for shipping/logistics (WaltonChain/ShipChain etc). Usually they rely on some sort of RFID or tamper proof sensor that can be logged or scanned at each point of arrival/change of hands. Thus, you would know 'where' the item is supposed to be, who the (current and past) owner is, and what the (geolocation and temporal) history of said item is since inception.
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#20 Post by Siun o'Connell »

In the supply chain world, Blockchain is the trendy topic and presented as the answer to ... well ... everything. I share the skepticism to some degree but also the hope we can gain better transparency - whether for wine or other goods.

I did recently meet a young woman who has started a company that embeds RFID information into basically a thread which can be woven into apparel - providing continuous tracking of the individual item from initial fabric through customer's use. For example, a store where I bought a t-shirt would be able to flag when I returned to that store and have a sales person suggest items to go with, etc. Pretty astonishing - and potentially ... interesting.

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#21 Post by Maureen Downey »

David Glasser wrote:That's great Maureen. It still depends on a trained human to detect the type of swap Jay suggested, and that costs money above and beyond the cost of maintaining the blockchain ledger.

How much money will influence the price point at which it becomes cost efficient to use the technology. So it may be effective for pricier wines but it wont eliminate all counterfeits.

And over time there may be less costly competitors entering the market who may not be as good at the human part. Which can add uncertainty back into the system.

This is not a criticism of what you are doing. I think it's fantastic. But it's not practically applicable to all wines.
David – Yes, a licensed user will have to scan the bottle confirm the leger in the Chai Vault. That could be the seller, if they are licensed. A licensed authenticator (which can be someone in the employ of the vendor, or a contractor brought in) will have to be the one to inspect and add in new bottles and update a ledger with a new condition report – when needed.

For the last year, I have been training 20 people all over the globe (Australia, Singapore, China, Macau & Taipei, HK, USA, Canada, UK, France, Switzerland & Italy) to be authenticators using my method and standards. There are more interested, and we are going to have a second group start training soon. So, there will be people to complete the authentication and certify secondary market bottles in the vault.

Currently wines that are offered for sale are inspected (theoretically) for sale. The firm puts the “trust us” sign out and the sale moves forward. I find millions of dollars per year in people’s cellars of wines that are fakes which have made it through this system. Some firms are really trying – others rely on plausible deniability – others clearly rely on paralyzed, blind inspectors. Regardless - any bottle purchased is only authenticated for that sale: should the buyer want to sell the same bottle in the future the bottle will have to be inspected again. This also costs money and resources.

Chai Vault certification takes care of the authentication for the lifespan of the bottle. Labor costs may vary, but the cost of the hardware, creating the ledger and software is less than those who currently offer stickers and chips only. And the more chips a vendor orders, the cheaper the manufacture gets. You are looking at just a few dollars per bottle for the chip and the software. We are less expensive than other, less robust, technologies.
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#22 Post by Maureen Downey »

David Glasser wrote:That's great Maureen. It still depends on a trained human to detect the type of swap Jay suggested, and that costs money above and beyond the cost of maintaining the blockchain ledger.

How much money will influence the price point at which it becomes cost efficient to use the technology. So it may be effective for pricier wines but it wont eliminate all counterfeits.

And over time there may be less costly competitors entering the market who may not be as good at the human part. Which can add uncertainty back into the system.

This is not a criticism of what you are doing. I think it's fantastic. But it's not practically applicable to all wines.
The only people that will use the Chai Vault will be people r=trained and licensed by me. We have built in oversight protocols so that if an individual authenticator is effing up - their license is revoked and their ledgers scrutinized / revisited.

Other competitors may try and make similar systems - but it will not be with my The Chai Method authentication techniques and standards, and Everledger's blockchain technology.
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#23 Post by Maureen Downey »

R_Gilbane wrote:So what happens if ownership is encrypted and the owner either forgets the encryption code (senility strikes!!!) or dies?
The owner’s name is encrypted from other’s views. R_Gilbane would always look like that to you, but when you go to sell wines others would see some number and letter code, so your name, and any private details, are not all over the internet. We also encrypt some docs regarding sourcing info of direct wine. With multiple vendors as licensed users we do not want our users to be seeing and poaching allocations from the negotiates, distributors…. So that has been addressed already as well.

If they die - the next generation can definitively prove provenence and authenticity using the ledgers. How great will that be?
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#24 Post by Siun o'Connell »

In the supply chain world, Blockchain is the trendy topic and presented as the answer to ... well ... everything. I share the skepticism to some degree but also the hope we can gain better transparency - whether for wine or other goods.

I did recently meet a young woman who has started a company that embeds RFID information into basically a thread which can be woven into apparel - providing continuous tracking of the individual item from initial fabric through customer's use. For example, a store where I bought a t-shirt would be able to flag when I returned to that store and have a sales person suggest items to go with, etc. Pretty astonishing - and potentially ... interesting.

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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#25 Post by Maureen Downey »

GregT wrote:But why would you need blockchain? You can use a chip, put it in the capsule, and it will tell you if the capsule was removed or the cork removed. And it can contain a chemical analysis of the wine, maybe an x-ray analysis, etc. Maybe we can't determine yet what would differentiate one wine from another, but if the concept of terroir is valid, certainly the wine from St. Emilion must be different from the wine from Seralunga. We have chips for dogs, why not wine? If a bottle has been opened, it's fraudulent, unless opened at the facilities of the producer and re-corked there. It would eliminate the requirement for visual inspection of the bottle.
Greg – just a chip is what others are doing. Just a chip can be counterfeited. Just a chip (if not destroyed in removal) can be reused on an empty if there is no ledger against which to compare the bottle using more than just a chip. Just a chip under a label, or imbedded in the glass – is ideal authentication for a refill. Prooftags can be 3-d printed top look just like the real thing. I’ve seen them peeled off and reused on counterfeit Roumier. AND - How many owners actually scan and check all the anti-fraud BEFORE they purchase? Lots of people will be stuck with counterfeit bottles that “looked ok” because they have counterfeit single layer packaging. Anything that is label and glass only based can used to substantiate a refill.
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How many of you have asked for verification of the anti-fraud on bottles before making a purchase? Has anyone asked for visual proof? Do you even know what the anti-fraud is? Even if supplied with assurances that the anti-fraud is in place and correct for vintage, you still have to rely on the good ole “trust us” from the vendor when it comes to provenance.

Chai Vault, blockchain certification gives us so much more: The point is not only to authenticate, but to give the buyer transparency BEFORE making a purchase on both authenticity and provenance – and to have all that info transfer with purchase to be useable agian. If the buyer can see proof of authenticity (including who the authenticator was, where and when) ONLINE with all the provenance history (available) about the bottle in an immutable, timeless, distributed ledger – BEFORE making the purchase, we have brought a level of transparency to what is now an opaque market which relies on “trust”. Ask David Doyle how that worked for him.

Bottles are easier than diamonds. Diamonds get acid washed and re-cut. Everledger can still verify them through that process. We employ many of the same data points in the blockchain ledger for bottles (over 60 data points plus images and docs) that they do for diamonds. Again – they are doing this with computer parts, meat and produce as well. Once you really understand the power of the blockchain it you can see the strengths it brings, and the possibilities for logistics and inventory tracking and control.
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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#26 Post by Scott G r u n e r »

A lot of my questions have to do with the cost/business model? Assume the producers/bottlers pay for the initial bottling/tamper protection costs? Is there a transaction fee every time a bottle changes hands or is verified? At the end of the day of course all costs are passed to the consumer, but curious how it is structured along the way?
//Cynic

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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#27 Post by J a y H a c k »

Dale Bowers wrote:
Lee B e c k e t t wrote:I can envision a scenario where the token rides with the bottle. You etch a QR of the public key onto a protected area of the bottle such as the punt, then place the private key on a small chip on the interior of the bottle at the base of the cork in a hermetically-sealed bidule similar to what's on a champagne crown cap. The chip could be RFID powered, or powered through magnetic coupling, and it would hash the verification to be checked on the blockchain. Remove the cork and the chip is destroyed, destroying the private key.

Given a couple bottles of wine and some lively conversation, I'm sure the crowd here can come up with some good ideas.

Existing bottles would need a trusted third party similar to what Maureen is providing, if I understand it correctly.
With if said bottled is Coravined avoiding your chip and refilled?
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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#28 Post by J a y H a c k »

Siun o'Connell wrote:In the supply chain world, Blockchain is the trendy topic and presented as the answer to ... well ... everything. I share the skepticism to some degree but also the hope we can gain better transparency - whether for wine or other goods.

I did recently meet a young woman who has started a company that embeds RFID information into basically a thread which can be woven into apparel - providing continuous tracking of the individual item from initial fabric through customer's use. For example, a store where I bought a t-shirt would be able to flag when I returned to that store and have a sales person suggest items to go with, etc. Pretty astonishing - and potentially ... interesting.
Beware. Big brother is watching you! The gummint will track your wine bottle and determine when you opened it. They will then tell your insurance company, which will pull your life insurance if you drink too much.
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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#29 Post by Andrew Hamilton »

Jay, I think there are two issues here. First is how to uniquely identify individual bottles without having that "identity" transferable or able to be cloned. The second issue is integrating those unique identities into a blockchain which is nothing more than the distributed cryptographic ledger of those bottles identities. If it were up to me to accomplish the first part I reckon I'd probably go with a contactless tag that contains a secret asymmetric key and embed that into the capsule over the cork. Or even integrate it into the top of the cork itself. If it's removed/damaged/coravined the tag is physically damaged and ceases to operate, rendering the bottle unable to be authenticated. So that would solve the transfer or cloning issue. Then I'd embed a cryptographic challenge into the blockchain ledger for the tag. So each ledger entry for any given bottle will have both certainty of the bottle identity and the ledger entry in the blockchain.

It's doable, but not simple. Getting security right is really hard. This would be no exception. But in the long run it would be a way to provide as much of a guarantee with regards to what's actually in the bottle when compared to current technologies.

I also recall some time ago reading about a epoxy/glitter elliptical curve cryptography technology that basically did ECC calculations off the diffraction of light shone through the epoxy/glitter medium. I reckon if that could be leveraged to provide a thin cap (similar to a wax seal on a bottle under cork) on top of the bottle that would be damaged if tampered with could also work. That said my memory could be slipping and my googling doesn't really produce any results for this tech.
That sounds about right.
Probably for the best.
They had a good run.

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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#30 Post by J a y H a c k »

Andrew Hamilton wrote:Jay, I think there are two issues here. First is how to uniquely identify individual bottles without having that "identity" transferable or able to be cloned. The second issue is integrating those unique identities into a blockchain which is nothing more than the distributed cryptographic ledger of those bottles identities. If it were up to me to accomplish the first part I reckon I'd probably go with a contactless tag that contains a secret asymmetric key and embed that into the capsule over the cork. Or even integrate it into the top of the cork itself. If it's removed/damaged/coravined the tag is physically damaged and ceases to operate, rendering the bottle unable to be authenticated. So that would solve the transfer or cloning issue. Then I'd embed a cryptographic challenge into the blockchain ledger for the tag. So each ledger entry for any given bottle will have both certainty of the bottle identity and the ledger entry in the blockchain.
. . .
This idea has some promise, but the critical component is not the block chain, it's the tag on the bottle that cannot be disturbed without destroying it. The only value I see to the block chain is maybe to people in the chain before the end user. Let's define the end user as the person who actually opens the bottle, as opposed to the retail buyer who intends to hold and resell. To the end user, your system could just as well give him a sensor that reads the tag and tells him the bottle is the one that it is supposed to be just before he breaks the seal. Come to think of it, why couldn't the people in the chain just get sensors that confirm that the tag is under the bottle? So long as the tag can't be spoofed, that would work. What does block chain add? It allows third parties to figure out who supposedly owns a particular bottle if the anonymity of block chain technology is avoided, but who wants to let John know that Sam owns a bottle of 2023 La Tache?
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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#31 Post by Walter Nissen »

Blockchain, fundamentally, allows a group of people who don't trust each other to agree on some digital data. If there is a company, government, or other organization in charge of vetting the data, the blockchain is not adding anything. Might as well just have the producer, certification authority, whoever, publish a database and a SHA-2 hash of it. That type of security model has been used with great (though not by any means perfect) success for software updates. Maybe there's a slight increase in security because multiple parties are each holding their own copy, so it would be harder to diddle with the contents and the hashes.

It's hard to believe that the industry would switch en masse to a new expensive system when, apparently, some sellers aren't even checking the serial numbers that do exist. Didn't one of these fakers get caught serving the same number bottle in more than one dinner? A QR code on each bottle would, in fact, be very helpful, but only if auctioneers and purchasers scanned them. If you trust your authenticator, that QR could even be applied to existing bottles. Could it be duplicated? Sure, it's just a really long serial number. But it would drastically cut down on the ease of fraud if it were easy to look up the chain of custody, even past some arbitrary point. Anyone trying to sell any quantity of bottles would have to do so without attracting the attention of the legitimate owners, or past owners.

I don't in any way want to talk down what Maureen Downey and company are doing to make fraud more difficult, but anything with "blockchain" on it is basically 90% b.s. at this point, so it makes me substantially more skeptical, not less. History is littered with "unbreakable" cryptographic systems whose creators made incredible claims about security. At this point, without a positive third-party audit by somebody like Bruce Schneier, I would bet money that there are serious flaws. A quick google didn't turn up any audits at all.

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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#32 Post by Andrew Hamilton »

J a y H a c k wrote:This idea has some promise, but the critical component is not the block chain, it's the tag on the bottle that cannot be disturbed without destroying it. The only value I see to the block chain is maybe to people in the chain before the end user. Let's define the end user as the person who actually opens the bottle, as opposed to the retail buyer who intends to hold and resell. To the end user, your system could just as well give him a sensor that reads the tag and tells him the bottle is the one that it is supposed to be just before he breaks the seal. Come to think of it, why couldn't the people in the chain just get sensors that confirm that the tag is under the bottle? So long as the tag can't be spoofed, that would work. What does block chain add? It allows third parties to figure out who supposedly owns a particular bottle if the anonymity of block chain technology is avoided, but who wants to let John know that Sam owns a bottle of 2023 La Tache?
I think what the block chain provides is a distributed ledger that *everyone* agrees on and yet no one individual controls. So in Walter's example above, what's to stop a malicious actor from hacking the producer, certification authority, etc database and include their own spoofed hashes in the database. At best it would lead to bad press for the DB owner, at worst it would cause them financial loss due to the mistrust the compromise imparts on customers. That's the "killer app" of the block chain, the fact that no one person or entity controls it. It also helps because it provides a "chain of custody" from a bottle being entered into the block chain to the present despite how many times it changes hands. It could be anonymously recorded or not, that could be determined by the current holder of the bottle that's on the ledger.

Sadly none of this would address storage/provenance issues but it would go a long way to ensuring the juice in the bottle behind that fancy label is actually what it claims to be.

On an entirely unrelated topic, GO JETS!
That sounds about right.
Probably for the best.
They had a good run.

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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#33 Post by Andrew Hamilton »

Walter Nissen wrote:History is littered with "unbreakable" cryptographic systems whose creators made incredible claims about security. At this point, without a positive third-party audit by somebody like Bruce Schneier, I would bet money that there are serious flaws. A quick google didn't turn up any audits at all.
Anyone who describes their crypto system as unbreakable is most likely a hack (no offence Jay!). Mathematically cryptography is quite strong, it's the implementation into a system (hardware or software) where the troubles come into play. Schneier would agree with that statement I suspect. Strong crypto doesn't necessarily deliver good security but strong crypto and a solid implementation does have a better chance of being and staying secure when compared to weakly implemented crap that relies on whatever buzzworthy crypto that's current in the market to prove its worth.

Specifically regarding block chain tech, I've not seen a serious "takedown" piece that pulls apart the foundation on which it's built. I have seen plenty of cryptocurrency website compromises and cryptowallet issues. but none of that is down to the block chain or bitcoin per se, more so the crap people have cobbled around it to make it a "useable" system.
That sounds about right.
Probably for the best.
They had a good run.

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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#34 Post by Walter Nissen »

Oh, I wasn't talking down cryptography or blockchain in general. When done well, as you say, they are on incredibly solid footing. But they are also families of technology, and everything depends on how they are used. When someone says, our data is protected by cryptography, do they mean the website connections, data in transit, data at rest, encrypted vs. merely signed, what ciphers, and most importantly, what security researchers have audited for vulnerabilities?

I read a technical presentation on the IBM Hyperledger that it's based on, and it seems like a standard IBM turnkey solution. Which is to say buzzword-compliant, and probably decent implementation. It's based on Ethereum, which as I understand it is well-audited and a good choice when you want large numbers of concurrent transactions. My B.S. detector really went off when it says they protect against "Snowden attacks", which is where the sysadmin is able to bypass the normal security restrictions and export data wholesale. That seems clearly impossible. Systems need maintenance, and most importantly they need security updates. A sysadmin has to be able to get in there and update things, just like on your home computer. You can try to minimize the access, but systems are going to have privileged users at some level.

Reading between the lines a bit, it seems that the blockchain part of the system is used so that multiple independent entities are running their own virtual servers inside containers within the same physical system. Which I don't understand the value of, because well-implemented blockchain works just fine with truly distributed nodes. Again, the secret sauce in the authentication of physical goods is the trust that someone has verified the item accurately.

Again, I'm just an enthusiastic amateur (though I've been following cryptography since 1999 or so when one of my dorm-mates started a distributed computing project to break RC5, a symmetric block cipher that was popular in the 90s).

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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#35 Post by Eric LeVine »

Maureen Downey wrote:In either case, the bottle will not match the blockchain ledger, no matter how good you are - the AI, tech and strength of the unique "bottle thumbprint" are better.
How *exactly* does AI enter into the equation? (Sorry, but my buzzword meter is going crazy.)

And where do you envision cellar management tools fitting in as well?
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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#36 Post by Walter Nissen »

Eric LeVine wrote:
Maureen Downey wrote:In either case, the bottle will not match the blockchain ledger, no matter how good you are - the AI, tech and strength of the unique "bottle thumbprint" are better.
How *exactly* does AI enter into the equation? (Sorry, but my buzzword meter is going crazy.)

And where do you envision cellar management tools fitting in as well?


That was exactly my response, Eric. I absolutely see the value of respected authenticators combined with the ability to check against the unique physical characteristics of the bottle. That all makes perfect sense. And someone like Maureen is the ideal person to do it. But when I hear "AI", "blockchain", "Internet of things", without a clear application, I immediately assume I'm being sold a bill of goods.

I did read some of the job listings for Everledger, they are looking for generalists, so-called "full stack" developers who know how to code a webpage and deploy it. But there's a whole wish list of skills after that (again, this is nothing sinister, I do the same thing when I'm writing a job description for a technical person; no harm in seeing if there's a unicorn out there). Pretty generic, and lots of copy-pasting. "Deep learning, computer vision, Experience with AI tooling such as Tensorflow, or Scikit Learn, ... , Cryptography, Cyber Security, ..., Deep learning, computer vision, ..., Experience with AI tooling such as Tensorflow, or Scikit Learn, Cryptography, Cyber Security, Machine learning, Computer vision, ..." It's a relatively early startup, and they just raised $10m in a "Series A" round which means that some VCs are putting in some real money, hopefully the technology will become more clear quickly.

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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#37 Post by Maureen Downey »

Eric LeVine wrote:
Maureen Downey wrote:In either case, the bottle will not match the blockchain ledger, no matter how good you are - the AI, tech and strength of the unique "bottle thumbprint" are better.
How *exactly* does AI enter into the equation? (Sorry, but my buzzword meter is going crazy.)

And where do you envision cellar management tools fitting in as well?
We are adopting, and will be improving on, existing Everledger https://www.everledger.io/ AI functions to recognize authenticity faster and more precisely than can the human eye. This is technology that already exists to vet handbags, perfume packaging and other products for some of the world's the top luxury brands.

We are creating a streamlined processes for secondary market wine inspection to eliminate or reduce the time needed for initial inspection or re-inspection/ verification of a ledger based on AI. For Chai Vault use, scan results can confirm and match a bottle to the ledger automatically, or fail if a bottle shows deviation from the ledger. For bottles not yet certified and inputted in the Chai Vault, scanning can result in a match with authenticity, be markedly counterfeit or need more human inspection. It's Hot Dog, Not Hot Dog, or needs more physical inspection to determine.

Certification in the Chai Vault includes over 90 data points, and requires individual bottle images, and input of proof of provenance when possible. The more we can automate that system - the better. Integration with existing POS & inventory systems can help pre-populate many fields - as you are abundantly aware, Eric. Of course initial input of individual bottles of secondary market wines is more time time consuming and takes more inspection time as while wine info may pre-populate, many aspects of the bottles unique condition and characteristics will not. Also - authenticators will have to make the final call as authentication is as still much more of an art than a science. But once that data has been uploaded and tied to the chip creating the bottle's blockchain ledger, future recognition of that particular bottle and having to both match its chip ID and it's "unique thumbprint" can be streamlined through a level of automation. That is possible through AI.

Buzzwords may be what many of you see here, but we see existing technology that is changing the world: From the elimination of blood diamonds and conflict stones (Everleger started to support the UN Kimberley Process Resolution), to the way luxury brands are protecting themselves, to how your food gets to your table, blockchain technology and AI are real and are already in place. You would be astounded to know how many farmers are already using blockchain technology to track their products, and how many food purveyors and even fast food companies are using blockchain technology to verify the authenticity and provenance of their raw products.
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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#38 Post by JIMCOH »

Eric LeVine wrote:
Maureen Downey wrote:In either case, the bottle will not match the blockchain ledger, no matter how good you are - the AI, tech and strength of the unique "bottle thumbprint" are better.
How *exactly* does AI enter into the equation? (Sorry, but my buzzword meter is going crazy.)

And where do you envision cellar management tools fitting in as well?
Eric, I think that the term AI has taken on a commercial usage that does injustice to the term Artificial Intelligence. It seems to now be in general use for camera based inspection systems.

I was at brunch with a couple that we meet in NYC about once a month. I was told that their son, who apparently is fabulously wealthy, had founded and owned an AI company. When I inquired as to the company I received a company name that I was not only familiar with, but one that I have been doing business with for a number of years. They are basically a very advanced vision inspection system company. They are very innovative, but AI, not by my definition or standards.

I guess it is the evolution of the term. If you are in the engineering or computer field, AI takes on another dimension that is way beyond capabilities being referred to as AI outside of those technical fields. [soap.gif]
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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#39 Post by Eric LeVine »

Maureen Downey wrote:It's Hot Dog, Not Hot Dog, or needs more physical inspection to determine.
OK, you had me at Hot Dog. Love the reference. Automated rules for label detection, OK, that makes some sense.
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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#40 Post by brigcampbell »

Labels could have similar technology to US currency like watermarks and security threads. That would be a huge hurdle to overcome and very easy to identify with optical technology not requiring sophisticated "AI"

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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#41 Post by Maureen Downey »

Eric LeVine wrote:
Maureen Downey wrote:It's Hot Dog, Not Hot Dog, or needs more physical inspection to determine.
OK, you had me at Hot Dog. Love the reference. Automated rules for label detection, OK, that makes some sense.
Love everything about SV - hence the jest - but what we are developing is not nearly as simple as label recognition.

We are developing 2 systems to streamline the inspection process:
  • 1- Bottles can be initially authenticated -more appropriately confirmed as consistent with authentic production- which is far more complex and detailed than simple label recognition. There is a lot we can train computers to recognize that the human eye does not see - and certainly not quickly.

    2- Bottles in the ledger can be individually identified and verified against their ledger.
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Can block chain solve the problem of wine counterfeiting, at least for future vintages?

#42 Post by Walter Nissen »

Ah, that all makes a lot more sense. Sometimes you get so deep in the jargon that when someone uses it in the conventional sense it seems off. AI is just a somewhat dated term in the industry, I would call what you are doing automated feature detection, using neural nets, but admittedly that may be way overboard to the layman. Similar to the way people cringe at "cyber security" as the industry term is now "infosec", but I doubt if you asked 10 people on the street what infosec is none would be able to tell you.
Maureen Downey wrote: Bottles in the ledger can be individually identified and verified against their ledger.
I hope some provision is being made for verifications in the case that there is no longer an instance of the blockchain server running or available. I thought about this today when the Internet of Things wine startup Kuvée announced they were shutting down yesterday. It would be a shame if the verification terminals became bricks, like Juicero machines. That's a problem blockchain would be helpful in solving, assuming the design takes it into account. I was amused to learn the other day that Amazon Echo alarms will not go off if the WiFi connection drops overnight, for instance.

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