A lot of people have spread narratives of the potential of the distributed databases across many industries. Some of them from top companies such as IBM are even talking about tomatoes on the Blockchain. Although that may sound absurd, in this article we will look at how the Ethereum Blockchain could potentially be useful to the wine lands of South Africa and abroad.

ERC-721 Tokens

If you’ve paid any attention to the blockchain community over the past few months, you would have come across a term coined as the ERC-721.

“The ERC-721 is Standard ERC-721 is a free, open standard that describes how to build non-fungible or unique tokens on the Ethereum blockchain. While most tokens are fungible (every token is the same as every other token), ERC-721 tokens are all unique. Think of them like rare, one-of-a-kind collectables,” according to its official website.

Kittens, Baseball Cards, Art, and Wine

Cryptokitties was the first Ethereum DApp to utilise the ERC-721 standard and, more recently, also MLB tokenizing baseball cards. If you still cannot quite understand the concept, post stamps are perhaps the perfect example. People collect stamps owing to their uniqueness and over time they are perceived as a store of value. This same concept applies to some bottles/barrels of wine in the sense that the longer you keep a desirable wine, the more valuable it becomes over time.

Similarly, some people also enjoy the idea of owning art but are not necessarily keen on the idea of taking on the risk of hanging it in their houses. This is mostly because galleries offer much better security and visibility. Now, imagine if you could own a piece of art in the form of a token. The token could be traded on a marketplace backed by the security of the art gallery, which makes sure the piece never leaves the gallery.

Wine producers could store barrels of desirable wines, each of them governed by a digital contract in the form of an ERC-721 token. These digital copies can be placed on a marketplace where wine enthusiasts can stack their bottles for the future or maybe just as a “liquid” investment, pun intended.

Barrels of wine could be redeemed from outlets operated by the producers by means of taking the token out of circulation.

Although this might sound like another of the many ambitious applications of blockchain technology, this would be a great way to build a low-entry asset class that could accessible to anyone, banked or unbanked.

This article was contributed by Kudzaishe Munangi. Kudzi enjoys margin trading in his spare time, which has stirred his interests in the underlying assets on those trades. He also builds cryptoeconomic models for peer-to-peer marketplaces.