Gone are the days when ‘investing’ involved accumulating golden precious, day after day (as if you were a fire-breathing dragon!). The world has transformed and with it all its contents. And while whisky has always been a valuable luxury asset to invest in, now the ways in which you can access this type of trading have changed.
We have already talked about how to take the first steps if you want to start investing in whisky, haunting and collecting rare whisky bottles on which to make long-term investments (and sometimes even long-term bets). And we have also given you some advice on how to move wisely in this market, to avoid fake bottles or other unpleasant surprises.
However, beyond the world of auctions (online and offline), the frantic search for the “ultimate collector’s piece”, and the related worries about how to best preserve the product purchased, is there more?
Well, yes. There is the world of Blockchain and NFTs.
I know. The idea might seem less romantic to you than the classic concept of a ‘private collection of whisky to be treasured’. However, this new approach to investing in whisky is no less fascinating.
If you want to know what NFTs are, how this new technology applies in the world of whisky, and most importantly what it means to buy an NFT of a bottle, you are in the right place.
Finally, after due introductions between you and the blockchain, Todd Wiesel, Founder and CEO of Baxus – “a platform that allows collectors and investors to safely store and secure their collectable assets while maintaining proof of ownership through NFTs”- will explain more about it in an interview.
What are NFTs?
Let’s start with the basics. NFT (non-fungible token) is an interchangeable digital asset traded over the internet. Meaning, is an asset that can’t be transferred or exchanged for a similar product. It is simply a digital certificate attesting to the authenticity and ownership of a non-fungible asset. NFTs are worthless as long as no assets are associated with them.
What is a Blockchain?
A blockchain is a distributed database that is shared between nodes in a computer network. Simply put, a blockchain stores information electronically in a digital format. It is a vault of maximum security. The innovation with a blockchain is that it guarantees the security of a data record without the need for a third party.
How does all of this apply to whisky?
Non-fungible tokens are popular as a way to protect artists’ work. Particularly, work created and shared through digital media. In this case, by using blockchain technology, the author can secure ownership of its work. Subsequently, the author can also track its work distribution. A.k.a. who is the one that bought a specific piece of art.
However, when you buy an NFT of a bottle of whisky, you are not buying a simple digital image. You are buying the actual physical bottle.
Nevertheless, your new property is not packed and shipped directly to you at the end of the transaction. It is stored by the NFT platform or distillery, thus saving you from storage problems. The NFT acts as an authentication certificate confirming that you can claim rights on that bottle.
That said, you have three options:
- You can keep the bottle as a luxury whisky investment. Without the inconvenience of thinking about how to store it properly.
- You can sell the rights on your purchase directly to another investor. No physical handling is required. The bottle remains safe in its storage. You only transfer the rights.
- You can drink the actual bottle. In the case of this dramatic business decision, the bottle is taken out of storage and shipped to you. Then, it is also removed from the NFT marketplace forever.
After this basic guide to the world of NFTs and whisky, let us now turn to the real expert in the field: Todd Wiesel.
Who is Todd Wiesel?
Wiesel is an experienced whisky trader and collector, focused on fine and rare bottles and casks. In his past experience, he was the Head of Fine & Rare bottles for Dalkeith Brokerage, a premier whisky brokerage firm. He has consulted for numerous brands and independent bottlers in the bourbon, scotch, and whisky markets.
What is Baxus?
Recently, Todd Wiesel has also founded Baxus, the infrastructure underlying the tokenization of physical assets. Long story short, they allow collectors and investors to safely store and secure their whisky-related assets while maintaining proof of ownership and authentication through NFTs technology.
All bottles and assets submitted to BAXUS undergo extensive authentication using machine learning, which is trained by spirits experts. A virtually foolproof method of saying goodbye to nasty surprises when buying bottles from private parties.
What about the collection of bottles they offer as assets? Believe me, it’s a real treasure chest.
But enough with the introductions. Let’s give the floor to Todd Wiesel.
A Chat with Todd Wiesel
NFT is designed to give ownership over something that wouldn’t ordinarily be able to be ‘owned’. How are NFTs used in the whisky world?
NFTs are currently being used in a number of ways, the most popular is of course NFTs of JPEG images. However, the technology behind NFTs is quite brilliant and helps create a globally recognized decentralized ledger proving who owns which NFT, as well as tracking the lifecycle of the NFT on the blockchain.
Our company, BAXUS, uses NFT technology to link physical bottles of rare spirits to an NFT on the blockchain, enabling users to buy, sell, and trade proof of ownership of physical bottles stored in our facilities. This is only the beginning though, there will be so many new uses for NFTs and blockchain in the whisky and spirits space!
The world of NFTs is just starting to be established, but there are still many doubts about it. What would you say to encourage someone to explore this subject and try to invest in it?
Like any “investment” the most important things to remind people to do are to do their research and due diligence. Many have speculated that the majority of the current NFT JPEG products will eventually go down to a value of $0. I think they are correct because most of the projects have no inherent underlying value.
The second thing I would advise someone who is interested in getting into this space is to spend some time getting educated on the difference between a “hot” and “cold” crypto wallet. This is important because while blockchain itself is secure, many people do not understand cyber-security and there are risks associated with trading any type of digital asset.
Furthermore, NFT investors need to make sure they understand the ecosystem they are trading in. Most NFTs are currently traded on the Ethereum blockchain, but Ethereum’s network is expensive to run, and therefore users can spend anywhere between $30 and $300 in fees to complete a transaction! BAXUS is built on the Solana blockchain which costs a fraction of a cent per transaction, so users can process their trades faster and cheaper.
I recommend these sites to learn more!
Some people consider NFTs to be high-risk investments. is this really the case?
Yes. Regular NFTs are very much so a high-risk investment. If they are simply digital art, then the risk is that these are relatively new artists without a proven track record. If they are accessible to a community, then people need to consider what happens after the excitement dies down. After all, there is only so much time that people can spend online chatting with their friends before they have to get back to work, or whisky
You are the founder of BAXUS. A project dedicated to creating an ecosystem in which investors can convert tangible assets into “valuable assets”. How did the project start and who are the professionals in the team?
BAXUS started off as a dream of being able to help eliminate the barriers to entry that prevented more people from getting into the world of whisky investing. As you know, My Name is Whisky launched a series of incredible, beautiful bottles that I wanted to buy. However, they are not available for sale in the United States. When I tried to have the bottles shipped to another country, they were stopped in customs and almost destroyed, before you were thankfully able to navigate their safe return to your offices. While many people purchase whisky to drink and enjoy, many also buy it to collect and invest.
The goal of BAXUS is to empower a global marketplace, where users can purchase bottles that have already been authenticated and are safely stored and insured in BAXUS controlled warehouses. This allows them to trade trustlessly over our platform without having to know who is on the other side of the trade. It also empowers people to be able to purchase items available for sale all over the world, without having to worry about shipping, logistics, duties, tariffs, and taxes.
The NFT owners can always redeem their NFTs in exchange for the physical goods if they want. Nevertheless, they have the opportunity to leave them stored and secured for safe keeping and easy sales.
It also allows people to be able to share photos and videos of their collections that people can verify they own! I’m sure you’ve seen all of the scammers on Facebook who advertise bottles for sale that they do not own, or whose photos they stole from other people. Now if someone shows you a bottle they want to sell to you, you can just ask to see the verification.
Certainly, you are one of the first to associate the NFTs system with whisky. So, in the case of BAXUS, what does it mean to buy an Asset?
When you buy an asset on BAXUS your NFT serves as verifiable proof of ownership of an authenticated good that is stored and insured in a BAXUS vault.
How can BAXUS, or NFTs in general, help the collector avoid all the challenges and risks associated with traditional whisky trading?
There are so many ways but I’ll give my top 4!
- Space. Since assets are stored in BAXUS vaults, people can own way more than they would have space for. It also means they won’t have to worry about keeping all of their nicer and rarer bottles locked up when they have company.
- Liability and Logistics. BAXUS assets stay stored in the vaults until the owners want to redeem their assets. This means that owners can trade back and forth internationally without having to worry about needing to properly package the bottles for safe transport and staying compliant with complicated international tax laws.
- Authentication. BAXUS authenticates all of the assets on our platform so buyers and sellers have the peace of mind when transacting.
- Data. BAXUS provides users with large amounts of historical pricing data for each of the assets listed on the platform to help them make educated decisions about what they want to buy.
Are there any specific risks of investing in NFTs relating to whisky?
Like any other whisky investment, there are always risks. First buyers should be sure that the company they are buying the whisky NFT from is a legitimate company. Anyone can create an NFT. This means you need to be careful. Do your research to make sure it’s an official NFT representing ownership of a real asset.
What would you recommend to someone approaching this world for the first time?
Start slow. There are definitely some trickier parts to wrap your head around. Make sure you don’t jump into anything too quickly. Do your own research. Don’t just rely on something you hear or an NFT that someone is promoting. There are a lot of scammers out there.
Can you share your thoughts on what you expect from NFTs and whisky in the immediate future?
Yes, I anticipate that whisky prices will continue to rise in the immediate future across the globe. I believe that the introduction of NFTs, and the elimination of international barriers and restrictions will also further facilitate a new wave of whisky investors into the space. Including institutional investors who may find it an interesting asset class that they can use to diversify their portfolios.
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