THE KNOWLEDGE
Who’s for a digital dram?
Ready to embrace a world of payment in ethers, non-fungible tokens, holograms and metaverse bars? They are all part of the whisky world already, whether you welcome these digital developments or not, finds Tom Bruce-Gardyne
Imagine, while reading this, you could somehow slip through the screen of your laptop or phone like Alice through the looking glass. Welcome to the Metaverse, that digital space proselytised by Facebook’s founder Mark Zuckerberg. It is a virtual world in 3-D, better than reality apparently, with stunning visuals and surround-sound audio. Great for our eyes and ears, but what of those ‘lesser’ senses of taste, touch and smell that are key to enjoying whisky, and indeed life, you could argue?
“Yeah, I couldn’t agree more,” says Sam Falic, who co-founded BlockBar six months ago as a platform where rare and expensive whiskies are sold and traded using NFTs, or non-fungible tokens. “Right now, I don’t think there’s a very big need for premium spirits purely in the Metaverse, that’s why we are trying to bridge this world of physical and digital.”
INTO THE ETHERS
Here is how it works in practice. A Scotch whisky brand launches a limited release on BlockBar, priced in ethers, a cryptocurrency akin to Bitcoin, with a US$ equivalent available. The bottles are shipped to Singapore, selected because “it’s known as one of safest places to store collectibles” and not for any tax reasons says Sam, and an NFT is ‘minted’ for each one.
A unique blockchain is created for the bottle, and the buyer receives an NFT as a digital receipt in the form of a jpeg or hologram. This is then stored in a ‘wallet’ that can be flashed open to show off your collection, or traded on BlockBar’s marketplace. Ardbeg, for example, released its latest publicity stunt – Fon Fhòid – as an NFT exclusive in April. That’s 457 bottles from two barrels buried in a peat bog, each priced at 1 ether (ETH) – around US$2,750 at the time of writing. Among the digital bottle flippers hoping to cash in on Fon Fhòid is @yearningDubird0, who is asking for 2.22ETH and @cautiousPears6 who wants 500ETH, the greedy devil. That’s well over a million bucks!
“I don’t think all those products are going to sell for those prices, and we don’t want them to,” says Sam. “We are not in the game to price gauge. We also try to make it very clear that when you buy an NFT, it’s not like you’re going to be making 10, 15, 20 times your money in a couple of days.” BlockBar’s target audience is “number one – current spirit collectors, and number two – people who have made money in crypto and are now looking to spend it,” he explains.
“Right now, I don’t think there’s a very big need for premium spirits purely in the Metaverse, that’s why we are trying to bridge this world of physical and digital.”
Sam Falic, co-founder, BlockBar
BlockBar’s target audience is number one – current spirit collectors, and number two – people who have made money in crypto and are now looking to spend it
“They want to be first to market, set world records and brag about selling out in seconds.”
Blair Bowman, whisky consultant
CRYPTO PIONEERS
So, what’s the attraction for the distillers? “They want to be seen as pioneers and innovators,” says the whisky consultant and broker, Blair Bowman. “They want to be first to market, set world records and brag about selling out in seconds.” He also believes brand owners are excited “because they see it as a way to attract a different audience that they haven’t been able to get in front of before.”
To which a cynic might add – it’s an opportunity to milk a few crypto billionaires before the crypto bubble bursts. “Remember cryptocurrencies are still a new and hyper-volatile asset class that could drop to near zero at any time,” says Vitalik Buterin, and he should know as co-founder of the ether’s network – the Ethereum.
Dalmore was an early mover, launching its Dalmore Decades on BlockBar last October. “It was really born through our partnership with the V&A [museum in Dundee],” says Kieran Healey-Ryder, head of whisky discovery at Dalmore owners Whyte & Mackay. “NFTs have been astronomically successful for art collectors, so we started to have collectors and partners in auction houses ask us if we’d consider doing anything.”
Yet digital art and whisky are very different beasts, and Blair is surely not alone when he says: “To transport NFTs into our world doesn’t make sense to me.” He believes that “it’s only perpetuating the collectability of these bottles because they are not really designed to be opened and shared, and in that sense it’s very ‘anti-whisky’, in my view. I find it quite sad that it’s endorsed by the brands who are saying ‘we don’t really care if you drink our stuff’.”
BETTER WHEN STORED?
Sam Falic is adamant that his products “are ultimately meant to be redeemed and consumed”. And yet you wonder if @cautiousPears6 and the rest of the crew on BlockBar are really that into whisky as a drink. Besides, owning a physical bottle is fraught with risks. “I’d have to worry about my friends coming round and knocking it over, or somebody taking a sip out of it,” says Sam. Better to keep it safely tucked in your digital ‘wallet’, there to flash at Mark Zuckerberg when you next bump into him in the Metaverse.
Kieran Healey-Ryder accepts that NFTs are a divisive issue. “There are whisky consumers who cannot stand the thought that the beautiful, tactile bottle and the contents within are sold digitally without anyone ever seeing it, touching it, nosing it or drinking it, and we would still say we only make whisky to be enjoyed,” he says. “But it would be dishonest to say that NFTs are not very similar to a well-worn part of the whisky world, which is the auction house.”
Here we are talking of whisky collectors who all face the dilemma of knowing that the monetary value of a bottle is destroyed the moment it is opened. But that is when the whisky comes alive and its true value can be shared. There is something cold and frigid about this world of NFTs, as Kieran concedes. “It runs the risk of taking the joy out of the category, the joy that comes from discovering a whisky in a bar with a friend,” he says.
But there is a solution if you want to play in this space. Rather than malt the barley, ferment it, distil it and age it in wood, do it all digitally instead. Don’t mess around burying casks in a peat bog, just create a hologram and let it float around the Metaverse forever, and leave the rest of us to enjoy the Real McCoy.
“It would be dishonest to say that NFTs are not very similar to a well-worn part of the whisky world, which is the auction house.”
Kieran Healey-Ryder, head of whisky discovery, Whyte & Mackay