by Tania Tomaszewska –
One of the wildest rides in the digital landscape right now is the world of NFTs. New NFT products seem to “drop” daily, offering consumers and investors unique digital renderings of art, wine, designer clothing, gaming, music, restaurant experiences, dating life and even real estate. What’s going on here? What’s the hype?
It all starts with the computer. A non-fungible token (NFT ) is a unique self-executing numeric code (aka “smart contract”) used to identify an object (either physical and/or virtual) using blockchain technology. When purchasing an NFT online you must use crypto currency, such as Ethereum, to obtain automatic ownership of a digital certificate of authenticity representing the relevant digital asset (such as a jpeg file of an image or video). The blockchain digital ledger is visible to all. So when you buy and sell your NFT that transaction is publicly recorded forever, displaying and preserving chain of title.
Although some NFTs are backed by an actual physical asset (e.g. a bottle of wine or art piece), NFTs are not the actual art or wine bottle but a digital proof pointing to those items. When you purchase an NFT you receive a uniquely identifiable numbered “edition” of that NFT offering (akin to holding a specific numbered print of an artist’s drawing).
Here’s a recent wine world example for context. World-renowned Australian wine producer Penfolds Wines has recently introduced a Penfolds Macgill Cellar 3 2018 Cabernet Sauvignon Shiraz NFT. Made only in exceptional vintages, this wine comes from select vineyards and is curated by Chief Winemaker Peter Gago. Only 14 barrels were made and the 300 bottles/editions of this NFT come from those lots. This wine is ultra-rare and not available anywhere for retail purchase. The first three buyers of six bottles/editions of this NFT receive a private virtual tasting with Gago during which they hear from him firsthand about the Penfolds story and this special wine. The first three buyers to “redeem” their Penfolds NFTs (by “burning” their digital token to obtain their actual six bottles from custodial storage) receive a personalized plaque with their wine gift box. This is a wine collector’s dream.
A few other luxury wine world NFTs include:
• Robert Mondavi X Bernardaud NFT Collection – A limited series of 1,966 individually handcrafted Limoges porcelain magnum bottles containing a proprietary Mondavi wine blend made from Napa Valley’s iconic To Kalon vineyard.
• Hennessy 8 NFT – A limited bottling of eau-de-vie from seven generations of Hennessy Cognac master blenders in a Baccarat blown carafe.
• Château Cantenac-Brown “Earth Art” NFT – A digital video piece of “earth” art sculpted at this famed Margaux producer by artist David Popa using vineyard soil (which would later be used to build the Château’s eco-sustainable cellar). The video capture of the “earth art” is the NFT holder’s asset which survives the decomposition of the physical piece.
• A Napa NFT Wine Club which offers, among other things, access to exclusive NFT drops, a digital seat at an exclusive wine bar and the chance to own part of a vineyard – all in the metaverse.
For collectors of rare wine experiences, NFTs have the potential to offer a high level of confidence regarding provenance as the blockchain provides transaction security and a line of sight to the exact chain of ownership for your NFT (starting with its minter). As investment values of goods are often based on their scarcity, exclusive limited editions of small lot or historic vintages appeal. Further, the integration of sensory experiences by bottling liquid art in porcelain art, for example (in digital and/or physical forms) takes things to the next level for those chasing the unique and sought-after.
It’s a whole new world of wine travel. Watch this space.
Questions or comments? Drop a line to Tania at tania@ttwinecounsel.com.
