Can Whiskey NFTs Revolutionize Luxury Spirit Collecting?
Rare luxury spirits have long been sought after by collectors, but will whiskey NFTs bring in a whole new audience?
Updated May 31, 2022
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In less than a year, "NFT" went from an obscure acronym to a cultural phenomenon. What started as generative art and cute profile pictures has become much more—NFTs now represent everything from membership to exclusive clubs to coveted pieces of contemporary art to ownership of luxury goods. Last year, 15 bottles of 46-year-old Armagnac cask Glenfiddich Scotch sold for $18,000 a pop, but not a single one of them actually changed hands. That's because those rare Glenfiddich bottles were minted and sold as Ethereum NFTs.
Whiskey NFTs have made the rare spirits market more accessible than ever before.
Taking something that already exists and putting it on the blockchain may seem like a gimmick, but there's a crystal clear rationale underneath. Rare spirits have long been a sought-after commodity traded by whiskeyphiles around the world, but chicanery is always afoot when there's money involved.
Fake liquids and inauthentic bottles are an ugly fact of life for wine and spirit connoisseurs, but technology could change that. Here's how whiskey NFTs are innovating the hunt for rare spirits.
What are whiskey NFTs?
What are whiskey NFTs?
Non-fungible tokens (NFTs) are distinct digital assets that live on a blockchain, and whiskey NFTs are unique tokens representing collectible bottles of rare spirits. Whiskey NFTs act as virtual certificates of ownership for bottles held in storage by companies like BlockBar and Metacask. These firms take physical bottles of the best investment whiskies, mint them as NFTs, and sell them in their virtual NFT marketplace.
Whiskey NFT holders are free to buy, sell, and trade their assets via the Ethereum blockchain, but they can also burn (permanently destroy) the NFT token to claim the physical bottle. The introduction of blockchain technology to spirits collecting is more than just a merger of the whiskey and crypto worlds. Whiskey NFTs bring a new level of transparency to the rare spirits market, eliminate jurisdictional restrictions posed by political boundaries, and heavily reduce the risk of scams and frauds.
One of the main benefits of whiskey NFTs is that blockchain allows the collectible whiskey market to enjoy unprecedented measures of transparency. Before NFTs, whiskey collectors could only show off their bottles to a handful of people who had to be physically present. But by putting their bottles on the blockchain—a transparent digital ledger that anyone can see—collectors are able to take bragging rights to new heights.
While being able to more easily show off your collection is great, gloating isn't the only benefit of whiskey NFTs. Minting certificates on the blockchain allows collectors to more easily establish ownership without actually needing the physical bottle. What's more, the blockchain will also contain all the previous owners of a particular whiskey NFT, so collectors can effortlessly establish the provenance of a rare bottle in their collection.
Another perk of whiskey NFTs is the security of blockchain. The Ethereum blockchain is very difficult to manipulate, so tampering with the ledger to commit fraud is nearly impossible. This means that whiskey NFTs are easier to authenticate, so the likelihood of a collector falling victim to a scam like counterfeit bottles is significantly less than in the physical realm.
While having a custodial service be responsible for the storage and maintenance of your whiskey bottle is not the trustless ideal espoused by hardcore blockchain fanatics, whiskey NFTs definitely make it easier to manage larger collections. Overall, the security advantages give collectors peace of mind when trading whiskies on the blockchain, provided their DeFi wallet is properly secured.
Whiskey NFTs have made the rare spirits market more accessible than ever before. One major restriction faced by whiskey collectors is the borders between states and countries; with each jurisdiction comes different laws surrounding alcohol, so collectors may find it hard to legally buy or sell a certain bottle without being physically present. On top of that, even if two collectors strike a deal from across the world, shipping restrictions can be a challenge for transporting physical bottles.
The digitization of entire transactions via the blockchain makes it no longer necessary to navigate the legal realm to trade rare luxury spirits. Collectors can buy and sell whiskey NFTs from across the world without needing to worry about catching flights to pick up a physical bottle or dealing with banks to facilitate pesky wire transfers. Additionally, whiskey NFTs introduced spirit collecting to a whole new audience, thus expanding luxury goods to new consumers that would otherwise have been in the market for Bored Apes or other metaverse NFTs.
Where can I get whiskey NFTs?
Where can I get whiskey NFTs?
The best way to get your proverbial hands on a whiskey NFT is through NFT marketplaces. Marketplaces like OpenSea host a broad range of different kinds of NFTs, while platforms like Metacask and BlockBar focus specifically on creating and auctioning whiskey NFTs to the highest bidder.
These whiskey NFT marketplaces also act as custodial services which hold on to the physical bottles while the NFTs are traded or sold on the blockchain, but collectors who want to taste a dram can cash in their NFT for the physical bottle.
Metacask is one of the first companies to bring whiskey onto the blockchain by making whiskey cask NFTs. Whiskey cask collecting not only poses storage difficulties due to their sheer size, but it's nearly unattainable for most retail investors. Metacask takes care of all the logistics for you by procuring, storing, and maintaining whiskey casks and letting you trade them on their marketplace as NFTs.
Whiskey casks are a lucrative medium to long-term investment, but they don't appeal to collectors as bottles do. While the novelty of spirit collecting is mostly absent from Metacask, it's better for serious investors because there's less speculation. That's why Metacask is great for investors who're more interested in turning a profit than building a fancy whiskey collection.
Those looking for something more flashy should check out the BlockBar marketplace. There you can find a wide variety of rare and vintage whiskey NFTs, most of which are individual bottles but there are some NFTs of entire cases containing between four to six bottles, as well. Rather than just buying bottles and minting NFTs, BlockBar forges partnerships with brands, so collectors can rest assured knowing that each NFT has a bonafide endorsement from big names like Hennessy and Johnnie Walker.
BlockBar is definitely the platform to keep an eye on if you're looking to get into spirits NFTs. Their marketplace doesn't just have whiskies but also includes NFTs of vintage wines and even luxury tequila like Patron Chairman's Reserve. BlockBar even partnered with Bored Ape #5400 to create Monkey Shoulder blended Scotch, which is being given away to Bored Ape NFT holders for free. The line separating whiskey and NFTs is getting blurrier by the day, so here's how to get started while you're sober.
How to buy whiskey NFTs
How to buy whiskey NFTs
Luckily for those who aren't familiar with crypto or Web3, whiskey NFT trading platforms have made their marketplaces super accessible and easy to use. While you can sign up for these platforms with an email or google account like you would for most other Web2 platforms, the best way to get started is by downloading a Web3 wallet like Metamask. Web3 wallets allow you to have true ownership of your NFT, so even if the BlockBar platform gets shut down, you'll still have custody of your assets and can trade them on other platforms.
Another great thing about whiskey NFT trading platforms is that they allow users to pay with crypto or fiat, so their marketplaces are as accessible as possible to old-school collectors and initiated DeFi investors alike. For instance, BlockBar lets users buy whiskey NFTs either with ETH or with a credit card or wire transfer. So, no matter whether you prefer to use cryptocurrency or good old greenbacks, your spirit collection can still live on the blockchain for all to behold.