More than likely, you’ve heard the term ‘NFT’ being tossed around in everyday conversation—and you’ve probably picked up on the fact that NFTs are taking the tech and finance worlds by storm. However, what you might not realize is that they’re also making waves in the world of whiskey.
NFTs are a new and rapidly evolving phenomenon, which is why it’s wise to stay up-to-date on how they’re impacting nearly every facet of modern life—including your favorite spirits. This article will explain everything you need to know about NFTs, as well as the exciting relationship between NFTs and bourbon.
What is an NFT?
The first thing to understand is that an NFT stands for a ‘non-fungible token’. The word fungible means replaceable or interchangeable, so a non-fungible token represents something with unique, one-of-a-kind value.
Here’s an easy way to think about it:
- A dollar bill is fungible because you can replace or trade it for another dollar bill that has the exact same value. A bitcoin is also fungible because one bitcoin is worth exactly the same as another.
- A baseball card is non-fungible because its value comes from its unique characteristics. You can trade one baseball card for another, but its value will vary based on the player, year, condition, etc.
The next thing to understand is that NFTs offer a groundbreaking way to create digital assets that possess unique value. Owning an NFT is akin to owning an original piece of art—other people can own prints or copies, but only you can own the original.
Finally, the last thing to wrap your head around is that NFTs exist as part of the blockchain, which means their value is digitally stored, verified, and protected. Although many NFTs are 100% digital assets (such as images, tweets, or pieces of code), others are linked to tangible items. In this case, the NFT stored on the blockchain acts as a certificate of authenticity for the real-life asset. These kinds of NFTs (which are important for bourbon enthusiasts) can be thought of as a digital deed.
NFTs and Bourbon
NFTs offer a new and exciting way for bourbon-lovers to purchase, own, and ultimately drink whiskey. Distilleries around the world, as well as third-party NFT companies, are now selling NFTs linked to spirits at a rapidly growing pace.
When you buy a bourbon NFT, you’re buying a digital image of a specific bottle. That digital image represents a certificate of ownership and authenticity for the physical bottle itself. That bottle will be stored by the distillery or NFT company until you decide to cash in your token, at which point you get the bottle and the NFT is considered ‘burned’.
Many people are drawn to NFTs as a way to purchase rare and high-end bourbon for the following reasons:
- The blockchain is extremely secure, which prevents fraud and helps ensure authenticity.
- Unlike buying sought-after bottles at a traditional auction, NFTs can be purchased from anywhere.
- NFTs are often purchased with cryptocurrency and using crypto to buy a real-life good with relatively stable value is often seen as a wise investment strategy.
Bourbon NFTs are still developing, and there are several new and exciting trends on the rise. One of these trends is the emergence of distilleries selling NFTs for a portion of a shared cask. These tokens represent a certain percentage of a barrel that the owner will receive once the aging process is complete. Another increasingly prevalent practice is adding experiential add-ons to the purchase of a bourbon NFT. For example, sometimes a bourbon NFT purchase will also include a luxury dinner, a trip to the distillery, or an exclusive tour.
An Exciting Opportunity
Whether you want to secure a bottle of high-end whiskey for your drinking enjoyment, or you’re looking for a new investment strategy, bourbon NFTs are a great way to use modern financial and technology tools to your advantage. Even if you aren’t ready to take the plunge yet, it’s a good idea to stay informed, and of course, to keep drinking delicious bourbon!
In fact, grab some Ezra 99.