When most people hear about non-fungible tokens, which are more commonly called NFTs, they often think of digital artwork. However, they have evolved into much more than digital art, and they are even entering the alcoholic beverage industry. Whiskey non-fungible tokens are some of the most popular types. Small or large businesses that want to take advantage of this trend have several options today. It helps to understand what physical-digital tokens are, how they work and the types that exist in the world of whiskey.
What Are Physical-Digital NFTs?
Non-fungible tokens are digital by nature. They are unique data units that represent unique digital assets, and they cannot be replaced with anything else. These tokens exist on a blockchain, which is a secure public ledger. People first used them to sell digital artwork. Although people could still feasibly copy images of the unique artwork online, only the token owner could prove ownership because of the verifiable information that could not be falsified existing on a blockchain. Eventually, the tokens evolved into physical-digital assets, which are also called phygital tokens.
For example, Sotheby’s sold the original world wide web source code as a phygital token. Also, profile pic non-fungible tokens come with unique PFP digital artwork and exclusive real-world assets like discounts on events or exclusive merchandise. They are also connected to communities where people can communicate with others who share similar interests or values. Those physical benefits are attracting more people to the world of non-fungible tokens. Additionally, some people and entities are selling these tokens today as digital assets without digital artwork, and they come with ownership of tangible items. Several types of businesses are taking advantage of this new and lucrative opportunity.
Types of Whiskey Non-Fungible Tokens
Today, manufacturers use a few different potential approaches to tying their whiskey to non-fungible tokens. There are a few manufacturers who sell bottled products that come with digital art. However, the other types have nothing to do with the digital artwork that most people think of when they hear about non-fungible tokens.
One of the most disturbing trends today is the growing number of counterfeit product manufacturers that target reputable brands. Whiskey companies that make limited-edition drinks or other products that are valuable may become targets of counterfeiting. One way to circumvent that is to connect valuable whiskey products to individual non-fungible tokens. By communicating to potential buyers that the authentic products are verifiable on a blockchain, it helps improve their confidence in making a purchase. Since those unique digital assets cannot be duplicated or changed, people who purchase bottles of the whiskey know that they are getting a genuine product.
Another way that some companies are using non-fungible tokens is by selling storage for high-quality whiskey. For people who have limited storage space or want to let the whiskey age, the option of having it properly and securely stored at the producer’s facility until it is claimed is attractive. In this structure, the company issues non-fungible tokens to buyers who purchase a product. The token gives the owner the ability to claim the product or sell it. If it is sold, the next buyer has the assurance of a genuine and claimable product since the digital asset exists on a blockchain. Once the bottle is claimed for use, the token can no longer be sold and cannot be duplicated.
Cask Ownership Share
As whiskey matures in casks, owners can still sell it with non-fungible tokens. In this case, they issue each token as a share of the cask. For example, a company may start aging whiskey in a cask in 2022 that will be ready to claim in 2042. The owners of the tokens could hold them or sell them before that time. In the United Kingdom and some places, there may be regulations that limit the way whiskey manufacturers can use this type of structure.
Some entities may sell additional digital or physical merchandise as purchase extras. Those extras are connected to non-fungible tokens. An example of a purchase extra that a few distilleries have offered is an experience opportunity. Some have offered tours or opportunities to try different products at the distillery to people who buy the non-fungible tokens. Those opportunities are exclusive and unique, which makes the phygital tokens attached to them more attractive to buyers.
Creating Whiskey NFTs
Distilleries that want to create their own phygital tokens may not know where to begin. The world of blockchain and non-fungible token technology is a complex and fast-growing space. However, the choice to use non-fungible tokens offers benefits to both the company and the buyer. For example, a company enjoys the benefits of offering something unique, attracting more customers and reducing the risks of being targeted by counterfeiters. For buyers, the benefits are owning something unique and potentially being able to sell the token for more.
Companies that want to create non-fungible tokens to sell whiskey or other products can benefit from working with a digital brand protection agency. Authena is a company that offers digital brand protection, blockchain solutions and physical-digital token solutions. Learn more about blockchain solutions at https://authena.io/nft-blockchain/ and NFTs at https://authena.io/m3ta/.