You may have heard how NFTs (non-fungible tokens) are transforming the world of digital art. Even world-class museums, such as the Uffizi Gallery in Florence, are turning to NFTs to boost COVID-related revenue crashes and to reengage visitors after shutdowns. Last week, Uffizi sold an NFT of Michelangelo’s Doni Tondo for €140,000. But do you know about NFTs and the world of collectible wine? Some winemakers are turning to the digital certificates to authenticate provenance and to see future returns on resales of their wines. Fine wine traders and collectors are getting involved, too.
First, though, what is a non-fungible token? You can get into the relatively new topic as deep as you wish to go, but Medium puts it in simple language: an NFT is a blockchain token, a digital certificate, that represents a unique digital item. It allows you to buy and sell ownership of this unique digital item. Anything digital can be sold as an NFT: art, music, GIFs, tweets. To date, US$69 million is the highest price paid for an NFT. An NFT can provide digital provenance and proof of ownership and authenticity of an item and it can be paired with a tangible item. And this is where wine comes in.
Virtual wine auctions
This month media reported that French winemaker Château Darius is selling its Bordeaux digitally with NFTs through website BakerySwap, one of the few online NFT marketplaces, at about €115 per bottle. Former NBA star Yao Ming’s winery is also auctioning wines paired with NFTs.
A wine retailer, Yahyn, recently teamed with California winery Skipstone to launch an online auction on OpenSea – another NFT marketplace – of an exclusive 6L bottle which is paired with an NFT. The physical bottle is etched with a QR code which is linked with the NFT to show provenance and proof of authenticity.
Jack Ambriz, Marketing Director at Yahyn, claims that this NFT auction is "the future of wine collecting. It's peace of mind for collectors to know that what they are buying is authentic and trackable. This is also a unique opportunity to give back to vineyards, since every time an NFT is resold, a percentage of that sale goes back to the vineyards. This means they can continue to take care of the hard-working people that make this possible to begin with."
Former NBA star Yao Ming’s winery advertises their NFT offers on their website
The future of fine wine collecting?
And there are several companies that tend to agree with Ambriz about the future of collectible wine. WiV, for example, is a blockchain technology company that creates NFTs for fine wine collecting and trading. They were one of the first to see fine wine trading moving to an online platform and they also utilize OpenSea. WiV has created a system which supposedly simplifies fine wine trading at each step.
Their blockchain technology allows the producer to allocate an NFT to each bottle they wish to sell. It allows traders to collect and store information about wine’s provenance and transaction history. After a transaction, the company even stores and insures the wine in a professionally managed storage facility. They claim to facilitate faster and more secure trades with reduced transaction costs – the future of wine trading as they see it.
Many believe that this technology will help bring wine to younger audiences. Also potentially beneficial will be its use against wine fraud and the sale of counterfeits. And let’s not forget the benefit to the producers themselves who will directly profit from each resale of the NFT, as explained earlier by Yahyn’s Ambriz. This is something that does not currently happen with the resale of fine wines.
Will the benefits of NFTs and blockchain technology within the wine trade come to pass, or is it a passing fad? Is this the future of wine collecting and trading, catalysed by COVID but sticking around? We will have to wait and see, but the investment could be a good one if you have the money.
By Kimberly Webb
Are you an NFT expert or involved in NFT selling or trading? What do you think about NFT and the future of fine wine collecting? Let us know.