[apatters]

Let's say everyone on the planet is Ethereum enabled tomorrow. What is the business case for the winery to use it in your example? I get that Ethereum or any other crypto can be another payment option for their customers. Beyond that what use does a winery have for a programmable substrate underlying its transactions with customers or suppliers? I'm not saying there is none but if you're going to rip on HN users, frankly it's hard to parse what this language even means.

[bsnsmsksjs]

I’ll bite. A winery could sell ownership of wine stored or wine yet to be made. The purchaser, if sold via an NFT, could resell that ownership with no interaction with the winery until claiming the wine at a later date.

This means both parties no longer need any relationship between the initial sale and claiming the eventual goods. The winery will simply be able to wait for someone to return with proof of ownership at a later date.

If the winery gave out certificates or built some app it would need to verify and maintain that. With an NFT there is very little work on their end.

Ultimately this turns these type of products into highly liquid assets. This will greatly increase their value to a potential customer and the initial purchase price. Which will make the winery more money for the wine it sells.

This can effectively be done with anything that can be claimed at a later date after initial purchase.

[EugeneG]

The question is can you really make it simultaneously cheap to trade and decentralized and always on. Or is the overhead of all that just make blockchain tech very awkward and suboptimal (especially since ultimately there's a centralized winery that honors the "claim" with actual wine - so no real need for decentralization). Instead why not just have a little centralized company that lets companies create ledgers of asset ownership for $300/month. If it's a real use case, any winery can sign up, etc.

Issue is blockchain tech doesn't actually solve anything

[diveanon]

Transactions on most L2 chains these days are less than a penny.

There are dozens of popular mobile wallets that make viewing, sending, receiving coins / nfts trivial.

The problem that it solves is that there is no need for you imaginary ledger company to exist at all in a blockchain model, the winery cuts out a rent seeking service and the user gets a more secure and portable product.

Automation isn't just going to hit manual labor, blockchain and web3 will allow for the emergence of fully autonomous "companies" that operate via smart contracts.

[cyounkins]

Is this secondary market of goods yet to be produced something that people actually want to have?

Today the way this works is usually with a ticket or a receipt. The guy with the email receipt on his phone gets the food he ordered. The guy with the ticket gets into the concert.

There IS a secondary market for event tickets. Legitimate transfers frequently happen everywhere else e-commerce happens. Questionable transfers happen on the street in what I assume is low volume.

[biztos]

People buy unbottled wine all the time, so maybe?

https://www.winemag.com/2019/10/01/a-beginners-guide-to-wine...

I’m not saying blockchain makes this any better, except in one sense: a lot of people with a lot of money are enthusiastic participants. If I had a winery you bet I’d be selling wine future NFTs, just to try and get the price bid up.

[dmitriid]

> A winery could sell ownership of wine stored or wine yet to be made.

Ah. You mean "a centralized entity creates a centralized way of providing and verifying ownership of wine"?

1. How does blockchain factor into this?

2. As always, descriptions like this betray how little crypto-peddlers know about real world. Buying future wine has been a thing as long as there has been wine https://www.winespectator.com/articles/buying-futures-3495

[darkFunction]

That's great! Hey look I would like to send you the rights to my crate of wine. You're the 1000th customer to my site. Or maybe you want to trade it for your in-game weapon. Or I just like you and it's a gift, anonymous internet user.

Of course I could just transfer directly to your Ethereum wallet. But why do that when I could explain you need to sign up to 'winespectator.com', I'll email them to arrange the ownership transfer, and if you're trading that weapon let's both sign up for a pre-agreed escrow service online and pay them a commission to arbitrage. How many forms do we need to fill in, and who is processing that data? I currently own my crate anonymously- only the person who eventually burns the token will need to provide details to the company for delivery.

As always, descriptions like this betray how little engine-peddlers know about horse breeding. Managing a stable has been a thing as long as there's been horses.

[dmitriid]

> Hey look I would like to send you the rights to my crate of wine.

You truly believe this can't be done without blockchain?

> You're the 1000th customer to my site.

You truly believe you can't track customers without blockchain?

> Or maybe you want to trade me for that in-game weapon.

You truly believe it's impossible to implement in-game trading without blockchain?

> Of course I could just transfer directly to your Ethereum wallet.

The only thing you could transfer is some meaningless numbers. What makes them meaningful is some central, trusted authority that will accept these numbers as proof of something. But then, since you depend on that authority to verify this... you don't need blockchain.

[darkFunction]

I think instead of reading what I wrote, you read "you need a blockchain to do this".

The anti-blockchain narrative on here is constantly attacking the strawman of "literally everything must be decentralised".

I'm arguing that a decentralised medium of exchange through which separate points of centralisation can interact is still a useful construct.

You're comfortable with your assets being codified in a thousand different databases in a thousand different representations but the concept of having a common database representing them as "meaningless numbers" is suddenly unacceptable.

[dmitriid]

So... Why did you write it? Of course you don't need blockchains to do this.

To reiterate: The only thing you could transfer is some meaningless numbers. What makes them meaningful is some central, trusted authority that will accept these numbers as proof of something. But then, since you depend on that authority to verify this... you don't need blockchain.

[biztos]

The interesting thing is not that you would need a blockchain to trade wine futures — obviously you don’t.

The interesting thing is that if you can sell the futures as (for example) NFTs then you put them into this Wild West of crypto enthusiasts where

1) All kinds of unpredictable things might happen to the token between sale and redemption! And

2) The culture of crypto enthusiasts might very well lead to much higher prices for your wine than people who actually know about wine think it’s worth, cf. Beeple.

Either or both of these things might motivate a winery to give it a shot, tokenize a few thousand future cases of their weakest plonk, and see what happens.

Just because your market works fine without the blockchain doesn’t mean there’s nothing to be gained by trying.

On the other hand, it might be illegal because: alcohol.

[dmitriid]

> tokenize a few thousand future cases of their weakest plonk, and see what happens.

What's the wine equivalent of apes and punks? :)

[koonsolo]

You can do all those things without a blockchain. It's just more practical using a blockchain.

I used to survive without a cellphone. It wasn't hard. You just called your friends when you and they were at home.

[lottin]

> It's just more practical using a blockchain.

The popularity of centralised exchanges vis-a-vis blockchain wallets suggests the opposite is true.

[dmitriid]

> It's just more practical using a blockchain.

In which shape, way, or form is it more practical with a blockchain?

[nkuttler]

If you rely on a trusted entity (winery) you don't need a blockchain to do anything you just described.

[maccolgan]

How are you going to transfer the right to have a wine bottle? By continuously signing legal documents?

[amunicio]

Stock brokers track perfectly the transfer of people rights to stocks millions of times a day without any decentralized ledger. In fact, a SQL DB has worked quite well for many years now.

If the wine cellar wants their customers to trade wine, I'm sure a centralized ledger based on a SQL DB would be much easier and cheaper to implement and scale to millions of transactions.

[maccolgan]

Yeah, that's surely trustless. And I totally trust the wine company to perpetually maintain and pay for such a thing, and totally not restrict the secondary market as has happened all the time.

[ShamelessC]

> In fact, a SQL DB has worked quite well for many years now.

When you allow people to write their own smart contracts, bugs will happen. This can't be fixed, only dampened with a weakened interface to the blockchain.

When a bug in a smart contract happens you may now have a dispute, across borders, over the intent of the smart contract and the actual behavior.

Who handles this situation?

[koonsolo]

Can I trade my wine in the weekend? Ah no, sorry, stock market is closed then.

Can I trade my wine at 5pm? Ah no, European wine stock market is closed then.

When you really 'own' the ticket, you can trade it anywhere you want, without being dependent on some exchange that's only open whenever and takes some fixed cut without any competition.

[lottin]

The fact that you can't trade on weekends is not because some technological problem, it's because there's no demand for trading on weekends. Do you think the technology suddenly stops working on weekends?

[chipotle_coyote]

Yes, this is probably what you'd do in this hypothetical case, and it's hardly unheard of for contracts to be written up with transferability clauses. Given that we exist in a world where digital signatures also exist, it's unlikely to be particularly onerous.

("Continuously" is probably not the right word, unless you are envisioning the rather unlikely case of this transfer happening on an annual basis!)

[lmm]

Sure, or if you're willing to trust an electronic database you can put it in an electronic database. How do you think wholesalers buy and sell wine at the moment?

[lottin]

Are you seriously claiming Ethereum has invented futures contracts? Futures contracts have been around for decades, maybe even centuries.

[derac]

Excuse my ignorance, how does the buyer of the token know it hasn't been redeemed yet?

[darkFunction]

You burn the token to redeem it.

[maccolgan]

Embedded expiry, it can't be redeemed before the wine is ready anyway.

[boc]

What happens if the wine goes bad? Who/what arbitrates in that scenario? Because from the winery's perspective, whoever currently holds that contract owes them money for the wine at a fixed price that was determined and sold in the past.

If I hold that contract and have to take delivery of rancid wine instead of fresh wine like I imagined, what's my recourse?

Basically how do you ensure the state of the real-world asset remains fixed throughout the duration of the contract?

[biztos]

In the case of wine, the real-world version of “going bad” is just that it’s not very good. When you bought the future wine, you were betting that it would be very good wine and you could resell it for more. The winery was selling it to you for “cheap(er)” because you assumed that risk.

So for actual wine, right now, you have no recourse: you bought the risk. I don’t think this would be any different with NFT-wine. Now and in the NFT case you already paid the winery, you owe them nothing more.

Now if they cheat and give you water instead of wine… I guess whatever real-world contract says you can exchange this token for wine would say which wine?

Most likely the first N wineries to do this would do it as a publicity stunt, and if it proved useful then there would be some precedent. Much of the wine world operates on reputation and trust.

For the vast majority of physical products that are not like wine: you’d need real-world contracts to back your smart contracts and the latter would only be useful for decentralization of the secondary market.

[boc]

So the "trustless" system still relies on you to trust the reputation of the winemaker.

What are we actually inventing here?

[CJefferson]

The problem with this type of thing (to me) is always what happens when reality meets the blockchain?

What is someone steals my NFT? I would expect a court would say the wine is still mine, so the NFT doesn't represent ownership any more.

What is someone loses the private key to their NFT? Do we just throw the wine down the drain? Again no.

[biztos]

The NFT is supposed to work like a bearer bond. You have to trust the issuing entity to honor it, but beyond that, possession is 10 tenths of the law.

https://en.wikipedia.org/wiki/Bearer_bond

IIRC with wine futures you have to either collect your wine or pay for its storage, if you abandon it then at some point (per the contract) it belongs to the winery. At least with wine I think there is a lot of precedent here, there are norms you’d want to fit your crypto doings around.

[CJefferson]

Thanks, that's a solid reply.

Personally, I don't want the world to go back to "Bearer Bonds", and given they were banned I'm guessing the US government (and I imagine other countries) doesn't either. However, I'm glad to hear a basis for NFTs.

[ipaddr]

What does facebook give it? A free marketing page and limited discussion board and the ability for anyone to find it.

Ethereum would give it another payment option for customers. But also another payment option for suppliers. Could open a new hidden supply chain where a middlemen is not required.

It doesn't solve physically shipping but it does resolve one problem. Prompt payment resolution. A check can take 7 years to bounce.

[serverholic]

> A check can take 7 years to bounce.

The longer I live the more insane the current system feels. I really don't understand why we put up with this stuff.

[kryptonomist]

A winery could assign a token to each physical bottle, and lets its customers freely buy (winery is involved) and then exchange their tokens based on the supposed bottle value ups and downs (winery is not involved any more). Then, from time to time, they come to the winery to take back a real bottle from a token.

Admittedly, there is little to program, but we can imagine all sorts of auctions, games (tokens becoming playable items in a virtual world, but still exchangeable for real bottles), etc., around those tokens.

[ipaddr]

Why would any of this need cryto? If you trust the winery to hold the wine you could trust them to rule the exchange. Each bottle could still have a token. Values could still rise and fall. All stored on a central exchange. These tokens issued by a trusted entity could perform the same function and can be cashed out.

The key feature of cryto is around connecting trustless entities. Once you centralize on a physical product stored in a trusted location by a trusted party you lose point involving cryto. Who cares how secure the token is when the winery can switch labels?

[tshaddox]

> Why would any of this need cryto? If you trust the winery to hold the wine you could trust them to rule the exchange.

That’s a little like saying “why would the winery need Apple to make computers for them, the winery could just develop their own computer hardware and software.” It doesn’t make sense for most wineries to develop its own online exchange system, and the fact that it’s technically possible for a winery to develop its own exchange system doesn’t mean that all existing exchange systems are pointless.

[chipotle_coyote]

The critique being made in the original article, I think, is that it's extremely hard to find a hypothetical use case for blockchain technology that can't be done without blockchain technology. A wine exchange seems to pretty clearly fall into the "things we can do pretty well without crypto" category, so one needs to explain what crypto is bringing to the party that makes it a marked improvement. In this particular example, both "trustlessness" and "decentralization" are off the table (e.g., there is only one winery and you are trusting them to hold the physical goods).

[koonsolo]

The difference is that you can pick the exchange where you trade your token. Because the ownership of the token is really yours.

If the central party charges 1% transaction fee, it's a 1% transaction fee. If they only open on weekdays, you can't trade in the weekend, etc.

When it's your token, you can trade it wherever you want.

[chipotle_coyote]

Maybe, but there's some assumptions buried in here, I think:

- first, the token has to be usable by any exchange it's traded on. Different blockchain technologies may not be compatible. (For instance, you can't move an NBA Top Shot NFT from Flow to Ethereum.) This is a solvable problem from a technical standpoint, but given how fiercely ideological different blockchains are, there may be non-technical stumbling blocks that arise here.

- second, there has to be an "off-the-blockchain" legal connection between the token and the object the token represents, something that's recognized legally as a "bill of sale." This isn't a huge hurdle and I'd assume the purchase of the token includes language that covers this, but that legal language might include arbitrary limitations, such as stipulating that if you don't use their preferred exchange they'll charge you extra fees, or even restricting the token to specific exchanges entirely.

This is an issue that I think a lot of "smart contract" proponents just haven't come to grips with yet: when you read "contract" in terms of a blockchain, think "API contract" rather than "legal contract". A cursory search suggests there are Flow to Ethereum NFT converters out there, but if you run your NBA Top Shot NFT through one, does the NBA still consider it valid?

- third, this example is specifically tying the token to a physical object, which adds other complications. You may be able to successfully trade your token on Sunday, but the wine store may still only be open on weekdays.

[rgallagher27]

You might want to avoid mentioning transaction fees when trying to promote the benefits of crypto...

[solomonb]

The point is that there are multitudes of other technological solutions readily available which solve the stated problem far more simply then a blockchain.

[tshaddox]

Of course there are alternatives, and some alternatives may be better or worse depending on the features and qualities you desire. Again, there’s nothing unique about blockchains here. You could say the same thing about any random pick out of the top 50 CSS frameworks.