NFTs — non-fungible tokens — have been on a tear this year . The term has even been named Collins’ Word of the Year 2021. While they first garnered interest in the art world (Christie’s sold Beeple’s NFT for $69.34 million in March) they are not limited to the space. And now, the wine and liquor industry wants a piece of the crypto cake too.
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Trading in NFTs climbed to $10.7 billion in the third quarter of 2021, an increase of more than 700% from the previous quarter, according to a report by blockchain analytics firm DappRadar.
“Rare works of art — and rare bottles of wine and liquor — have been collected and traded for centuries,” Alex Salnikov, co-founder and head of product at NFT marketplace Rarible, told GOBankingRates.
“But until recently, a fully digital economy of ownership and exchange hasn’t existed. NFTs enable this new system for anyone with a passion to open new financial and creative avenues for collectors of rare items. As the digital world evolves, NFTs have also developed utility components, enabling consumers to enjoy experiences paired with their collectibles,” he added.
For example, BlockBar, an NFT marketplace that connects consumers and collectors with the owners of luxury wine and spirits brands, will sell a limited edition NFT with a set of The Dalmore Decades No.4 Collection on Dec. 7.
“The NFT corresponds to the physical bottles stored in BlockBar’s facility in Singapore. These NFTs can be “burned” or exchanged for the physical bottle it corresponds to or resold as a means of investment through the blockbar.com marketplace,” Dov Falic, Founder of BlockBar, told GOBankingRates.
This asset-backed NFT from the BlockBar platform benefits the buyer by guaranteeing authenticity and ownership verification, as well as offering a storage solution and handling insurance, he added. The winning buyer will have the opportunity to pay in either crypto or fiat and doesn’t have to ship the collection until they would like to receive it, and that’s anywhere in the world. The other option is for the buyer to put the collection up for sale on the blockbar.com marketplace for any collectors to purchase without the physical product moving from our storage facility.
“In short, the NFT serves as proof of authenticity, verification of ownership and the right to have the collection redeemed at any time,” he added.
And this trend is quickly growing. On Dec.2, Robert Mondavi launched the Robert Mondavi Winery x Bernardaud NFT collection, an offering addressing the global issue of counterfeit wine by employing a scannable authentication system, according to a release.
Michal Cymbalisty, co-founder of decentralized exchange Domination Finance, told GOBankingRates that the trend is picking up steam as “it’s all about ownership.”
“The same way artists and creators are able to open and own their digital galleries with proof of ownership through the blockchain, alcohol aficionados can build their collections through NFTs,” Cymbalisty said. “This is where digital assets meet the real world. What is better than owning a rare, highly coveted bottle or barrel of booze? Owning a one-of-a-kind token that proves you’re the owner of said booze. These NFTs also let you easily show off your collection.” Other Benefit of Buying Wine & Whiskey NFTs
A key benefit to investors is that they can buy and sell NFTs of collectible wines and whiskeys without ever physically possessing or storing the bottles themselves, Cymbalisty shared.
“Going one step further, if these NFTs are fractionalized, it could allow for larger groups of people to invest in or speculate on rare bottles that they otherwise not be able to afford,” he said.
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And that’s just what happened with Blockbar’s November sale of a limited edition NFT tied to a rare Penfolds Magill Cellar 3 barrel of wine made from vintage 2021, which was sold to a small group of investors in 12 seconds for $130,000.
Alex DiNunzio, co-founder and CEO of Jambb, a digital comedy collectibles startup giving comedians the opportunity to create additional revenue streams from their content through NFTs, echoed the sentiment, saying that “collectors are not only purchasing NFTs of the entire product, but are able to purchase part of it with fractionalization.”
“This allows people who ordinarily would not be able to participate to get in on the action and engage more deeply with their favorite brands,” he […]
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