Real-World Application Spirits brands find utility in NFTs by tying them to actual bottles and experiences. BY JON PAGE
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midst an onslaught of headlines such as “Crypto Firms Quake as Prices Fall” and the likes of Bill Gates calling cryptocurrency and non-fungible tokens (NFTs) a sham, it may be easy for most brick-and-mortar business owners to altogether dismiss them. But it may be impossible for distillers to ignore NFTs, which are digital assets frequently bought with cryptocurrency and stored in a blockchain (essentially a digital ledger), as a growing number of startup digital marketplaces are offering NFTs tied to real-world bottles of spirits and experiences. Take, for example, a recent auction of rare whiskey from Buffalo Trace Distillery. In March, the Frankfort, Kentucky-based distillery sold NFTs representing five 6-liter bottles of O.F.C. Bourbon whiskey—distilled in 1982—via auction with BlockBar. All told, the auction raised $280,000, with proceeds benefiting a handful of charities. The bottles are available to be redeemed by Dec. 31, and the NFT holders will also unlock an invitation to the distillery for a private VIP tour. Companies like Metacask and BAXUS are also focusing on bottles, casks and experiences tied to NFTs. And while there are certainly questions about compliance, the marketplaces offer distilleries a chance to reach new audiences.
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Before the Buffalo Trace auction, Sara Saunders, vice president of global marketing for Sazerac Co. (Buffalo Trace’s parent company) says there was no expectation about how much the whiskey would fetch. It was the first NFT for Sazerac and the first bourbon NFT for BlockBar. But Saunders was thrilled with the outcome, and she offers advice for craft distillers who might see NFTs as a fad. “Like all new technology, there are learning curves,” says Saunders. “Things we think are fads we’re still utilizing and finding new uses for 10-plus years later. By embracing new technology, one can reach new audiences who are also in the discovery phase. It’s like distilling whiskey— the concept is not new, but everyone is always looking for ways to improve it and innovate within that space.” When it comes to the space of NFTs, it has traditionally been known for pieces of digital artwork, some of which have sold for record prices. Last year, an NFT of digital art sold for $69 million in a Christie’s auction with the final payment made in Ethereum, a form of cryptocurrency. Also last year, a collection of digital art known as the Bored Ape Yacht Club became a hot commodity. Initially, 10,000 NFTs of bored-looking cartoon apes were created and sold out for the equivalent of $200 each. But a rare Bored Ape Yacht Club NFT later sold for
$3.4 million, and the cheapest available options at the time of this publication were available for the equivalent of $100,000. That’s down from about $340,000 as reported in early may by The New York Times, before the most recent wave of headlines predicting crypto’s demise. And before Gates, at a tech conference, said digital asset trends are “100% based on greater fool theory” and mocked Bored Apes, joking that “expensive digital images of monkeys” will “improve the world immensely,” CNN reported. Others remain optimistic about the future of NFTs. Amanda Whitcroft is the owner of Panda PR, a New York-based boutique agency specializing in cryptocurrency and technology. She says the latest hit to the crypto is nothing new, that this is part of a cycle. “This stuff is not going anywhere,” says Whitcroft. She sees NFTs and cryptocurrency as a way
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