Now that you’ve got the basics of NFTs, it’s time to put your new knowledge to use. It’s no exaggeration to say that every industry is experimenting in this new space.
Macy’s sold NFTs of floats as part of this year’s Thanksgiving Day parade. Simone Biles released an assortment of animated NFTs of her iconic moves. Coca-Cola raised $575,000 for Special Olympics International in August from the company’s first-ever NFT sale. Louis Vuitton launched a game in honor of its founder’s 200th birthday and the prizes are NFTs.
Winemakers and whisky companies are also releasing these digital collectibles, as a way to market their wares and to create a new way to establish the provenance of rare bottles.
Here’s a look at who is doing what with NFTs in the world of fine wines and spirits.
Wine and NFTs
With many NFTs, there is no physical object connected to the digital file. Some winemakers are changing that approach. Penfolds is one of the biggest names to offer an NFT connected to a physical object. In November, the company put up for auction an
NFT linked to a barrel of wine that will be bottled in 2022. The digital token represents ownership of the wine and the listed price was $130,000. The Shiraz Cabernet Sauvignon blend is from a 2021 vintage is not available for public purchase.
The Penfolds NFT is an investment in a future glass of wine, but there are options to enjoy wines backed by NFTs now. In April, NBA player Yao Ming’s Yao Family Wines offered 200 bottles of a 2016 Cabernet Sauvignon backed by an NFT. The auction on the NFT marketplace lasted 48 hours and some of the proceeds went to non-profits in the Bay Area.
Some winemakers are using the hype and trendiness of NFTs to launch new brands. Hello Fam is an all-NFT wine company based in Israel. Sommelier Lauren Valle and artist Stephen Osborne created 1,000 NFTs to celebrate rare and iconic wines and released them in lots of 50. BitWine is the official wine of EthereumTowers, a “decentralized, community-centric real estate project” selling apartments in the metaverse.
Whisky NFTs
If you prefer to stay in a world where you can hold your drink in your own two hands, there are options for whisky drinkers as well as wine aficionados. Irish distiller Kinsale offered an NFT for auction this spring for a 200-liter cask. LiquidCraft launched a “Dragons and Bourbon” series in November that includes digital artwork and a bottle of bourbon from The Heart Distillery in Windsor, Colorado. LiquidCraft published a “litepaper” setting out goals for its NFTs and related marketplace.
If you're looking for NFTs from more familiar brands, BarrelFi and BlockBar both have opportunities for buying NFTs linked to physical bottles.
The Penfolds NFT is on BlockBar and the company launched with a Glenfiddich bottle. BlockBar uses the Ethereum chain to track ownership, trade NFTs, and redeem the digital files for physical bottles. The company also will store bottles for customers.
BarrelFi launched its first NFT distillery collection with Striped Pig Distillery. The initial offering was an NFT linked to one bottle of Striped Pig Bourbon. BarrelFi estimated the barrel will yield 111 bottles and minted 100 NFTs in October. BarrelFi listed these NFTs on OpenSea, an NFT marketplace, and the collection sold out by early November, according to the company.
What’s a marketplace?
Several sites—OpenSea, Autograph, BlockBar— manage the auction and sale of all kinds of NFTs. OpenSea is the biggest and offers a little bit of everything. Other sites, such as Autograph, specialize in a particular sector. Tom Brady is a co-founder of that marketplace which features NFTs from athletes.
Each marketplace has its own way of buying and selling NFTs. Some deal in credit cards and US dollars while others require transactions to be completed via cryptocurrency. BlockBar conducts its sales in Ethereum or credit cards.
Just like there are many kinds of cryptocurrency, there are also multiple blockchains to track the currency and NFTs. Ethereum is the oldest and most well-known blockchain. Most NFTs are linked to that particular chain, although Liquid Craft’s NFTs are on Ethereum and Binance.
This is one of the potential weaknesses of NFTs. There can be only one bottle of a particular vintage on Ethereum, but that same NFT also could exist on the Binance chain.
A few last details
Before you jump into the NFT world of fine wines and spirits, do a little research. These businesses are digital natives, which means that you’ll need to navigate Twitter, Discord, and Instagram to do this research. You’ll need to understand the details of how these transactions work as well as what each offering includes. Everyone is still experimenting so there is no standard approach yet.
Finally, keep a sharp eye out for scammers. Cryptocurrency has attracted a lot of bad actors and there’s no central authority who can protect you. If something sounds too good to be true, it probably is.
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