Cheers to wine NFTs!
After making it to the mainstream during the pandemic, non-fungible tokens (NFTs) seem to be everywhere. If you go onto some well-known NFT marketplaces, such as OpenSea and Crypto.com, you can easily find all sorts of NFTs in their dropdown menus, ranging from art, memes and music to photography and sports for purchase or rental. Lately, the NFT market has even welcomed wine NFTs to the space.
The combination of NFTs and wine may sound like a mismatch. But, it is definitely not a mistake because stakeholders in the wine industry benefit from it in various ways. Most importantly, integrating NFTs into the wine industry creates more opportunities for a business to thrive. Read on to find out how!
What is a wine NFT?
There are two major types of wine NFTs. The first is just like general collectible NFTs. These wine NFTs remain purely digital and intangible, meaning that buyers won’t get to taste the wine they have purchased.
Examples of this category are the wine NFTs created by the Toronto-based company, BitWine. In April 2021, the company released 1,000 original wine NFTs on large NFT platforms, like OpenSea, in the form of pixel art. Like the famous Bored Ape NFTs, these wine NFTs are categorized based on their rarity; the rarer the wine, the more expensive it is. As of writing, the most expensive wine NFT created by BitWine on OpenSea is BitWine #444 (a 2018 Côtes du Rhône), which is priced at 444 ETH (US$676,038.84); while the cheapest are BitWine #370 (A 2020 Chianti) and #305 (A non-vintage Sparkling wine), which are priced at 0.05 ETH (US$76.13).
The second type of wine NFTs are “physical twin” wine NFTs, which refers to the digital counterparts of the physical bottles of wine. For example, in April 2021, Yao Family Wines, a critically-acclaimed family winery established by former NBA star Yao Ming in Napa Valley, California, released 200 “physical twin” NFTs for its exclusive top wines 2016 The Chop Cabernet Sauvignon. This made it the world’s first winery that pairs wine with NFTs. Those who buy these NFTs will receive an authenticity certificate signed by Yao Ming. Buyers will have the option of either getting the wine delivered to their homes or having it stored in a premium cellar in Napa Valley.
What do wine NFTs mean for wineries?
An effective tool in fighting forgeries
If you have been closely following the wine industry, you must have heard of one of the most notorious wine fraudsters in the world, Rudy Kurniawan. Long story short, back in the early 2000s, Kurniawan used his talent in wine tasting to produce fake fine wines by putting cheap wines in fine wine bottles or simply altering expensive bottles with phony labels and stamps.
Counterfeiting fine wines may have been possible back then, but not anymore. Since wine NFTs run on the blockchain, historical ownership information—like when wines are minted as NFTs and who owns them—is encrypted with cryptography. This makes it near impossible for anyone to sell fake wines, since there is no way to replicate or forge an NFT authenticity certificate (like the ones being given with Yao Family Wines’ NFTs).
Companies are actively trying to leverage the blockchain to fight wine counterfeiting. One such company is Wokenwine, a “wine + NFT” company that aspires to establish a fair, transparent and ethical business ecosystem for the global wine industry. In April this year, the company announced its plan to launch an online platform, where wineries can use NFTs to track their wines and inhibit counterfeiting. Although the new platform is still in progress and has not yet been launched, wineries are very likely to benefit from it.
A new way to expand the customer base
Although fine wines appear to be priceless to some, not everyone is into wine. To put it simply, if wineries keep selling physical wines, they can only target traditional wine buyers or collectors, making their customer base very limited. But now, with NFTs, wineries can pair different digital collectibles with their wines, such as unique artwork, to introduce and promote their wines to new customers.
For example, Château Darius, a celebrated winery in France, has created NFTs for each of its vintage wines and even started selling digital Bordeaux wines on the decentralized finance (DeFi) platform BakerySwap for 100 Bakery Tokens. Each NFT the winery offers includes unique artwork, two physical bottles and wine storage facilities. Flavien Darius Pommier, the owner of Château Darius, hoped to make his wine popular worldwide and appeal to younger drinkers through NFTs.
What do wine NFTs mean for wine buyers?
A new form of investment
Before wine NFTs were here, all you got after purchasing wine in-person or online was a physical bottle of wine. Now buyers can use their wine collection as a means of investment.
For instance, Mike Barrow, the owner of a winery called Costaflores in Argentina, lets buyers become part-owners using NFTs. When people buy wines from Costaflores, they can scan the labels on the bottles and fill in a questionnaire, after which buyers will receive an NFT that is linked to a share of the winery.
A traceable source of wines
As we mentioned, NFTs can help prevent wine counterfeiting; given that, you may be wondering where you can purchase wine NFTs safely. Based in London, Oslo and Singapore, blockchain-based asset tech company WiV Technology teams up with vintners (wine merchants), wineries and distributors worldwide and puts together a platform for the sale of wine NFTs. Unlike BitWine, which sells purely digital wine NFTs, WiV Technology mints and tokenizes physical bottles of fine wine into NFTs while storing the physical bottles in top quality international cellars. Since WiV technology will record basic information about each bottle of wine before selling the NFTs (including authenticity and provenance), the trading process can remain transparent while allowing customers to purchase fine wines on the platform peacefully.
Are NFTs the future of the wine industry? We’ll see. That said, whether you’re a fan of wine or an amateur collector, wine NFTs might turn out to be your next investment opportunity.
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