Is Blockchain Changing the Fine Alcohol Industry?
Blockchain technology opened doors for premium alcohol businesses to provide investors with an easier way to invest in fine liquor and ensure the assets’ authenticity.
A New Way to Invest in Fine Liquor
Fine liquor is not just a trophy for the collector’s community but also a great alternative investment possibility. It has outstanding price stability and is less volatile than other assets. However, investors are still apprehensive about investing in liquor and trading it since some obstacles exist.
Confirming the origin of the liquor, shipping, storage, and high fees – all make alcohol trading complex. When blockchain technology, and non-fungible tokens (NFTs) in particular, entered the scene to the practices around investments in alcohol changed.
Since 2021, NFTs have become a rising trend within the luxury alcohol sector. In the last year, high-end brands such as Hennessy, Glenfiddich, and Bacardi introduced NFTs to accompany their limited-edition products.
Earlier this year a magnum bottle of champagne ‘Champagne Avenue Foch, 2017’, embellished with a Bored Ape NFT, was sold for $2.5 million on NFT marketplace Opensea, shattering auction records. It is possibly becoming the most expensive bottle ever sold. The investors’ attention shows the growth of digital assets within the alcohol industry.
In attempt to capture this early market, investment platforms, like Flasko, are also popping up to pair investors and premium products using blockchain technology.
Solving the Problem of Storage
The main difficulty that fine liquor investors face is the question of storage, as premium alcohol requires special storage conditions to preserve its quality and value.
By providing storage facilities for these premium investment liquors while trading their digital assets, blockchain technology and the alcohol business could revolutionize the industry.
For example, the investment facilitators could store premium whiskeys, wines, and champagnes in an insured and licensed warehouse. Strategies like this could potentially help ensure the quality of the assets while allowing the users to purchase either a fraction or 100% of an NFT representing the particular bottle or basket of products.
Similarly, the digitalization of the assets makes the trading process more accessible, as NFTs could be traded via digital liquor trading platforms without actually transporting real-world assets.
Instant Proof Of Origin
There is also another potential benefit of having liquor assets on the blockchain. Blockchain could be used to ensure an asset’s authenticity and how it was stored, which defines its value.
The approval of the liquor origin involves a significant amount of paperwork that must be personally reviewed at every stage of the procedure, which reduces the speed of the trade.
When it comes to tracking liquor ownership, blockchain technology and tokens are a good option. It is nearly impossible to fraudulently claim tokenized asset ownership because of decentralized systems.
Blockchain allows both buyers and sellers to have faith that the investment they are making is genuine and secure against fraud. The withdrawal of paper-based paperwork allows for the very immediate completion of transactions.
The changes and digitalization of one of the oldest industries come slowly, but many beverage companies are hopping on the new wave of using blockchain.
On the Flipside
- One of the main challenges that the digitalization of the fine liquor industry can face is the archaic market, which might not be ready to go digital. The typical fine liquor investor may not be equipped to navigate a digital world.
Why You Should Care
Alcohol is one of the most popular segments in the sin stock industry. Since alcoholic beverages are seen as consumer essentials, demand won’t fluctuate regardless of how the economy is doing.
Read more: https://dailycoin.com/is-blockchain-changing-the-fine-alcohol-industry/
Text source: DailyCoin.com
