Northwest Wineries Slowly Enter ‘techno Territory
Cryptocurrency, blockchain, transaction tracking, and non-fungible tokens don't sound like what you'd expect to hear when you're talking about blame.
Generally soil , variety, pH, tannins and brix. However, these and other phrases could enter the lexicon of wine lovers sooner than you think. It's a bit tricky, so we need to define some terms as we unravel the mystery and begin to understand this new trend.
If something is interchangeable, it means that it is essentially an interchangeable product with a similar product. Think of two barrels of oil or a bushel of wheat. If something is unique and quantitatively unique, it is not and therefore has unique values. (I never thought the old Econ 201 sayings would haunt me.)
Non-Fungible Tokens, NFTs, are unique items that can be physical objects, music, or artwork that can be digitally identified and tracked. In essence, the digital blockchain houses a series of numbers and letters that identify each NFT with its "digital ID."
Blockchain, hosted on thousands of computers around the world and constantly verified, makes each element immutable in its uniqueness in a completely decentralized system.
The famous writer Mike Fizet is known throughout the world as a "wine economist," but I remember him as a professor of economics at the University of Puget Sound. He had just published his fifth book , Wine Wars II, so I asked him to define NFT.
"NFT or non-fungible token is a digital asset that is attached to a physical object, such as a piece of music, a piece of art, or even a bottle of wine, and typically uses digital blockchain technology to prove ownership and any transaction". He wrote. He "tokens are 'non-fungible' in the sense that each one is unique to the entity it represents, unlike 'fungible' coins that can be traded on markets for many different currencies or commodities."
Why should we care? Well, following the money is a good reason.
NFT sales are estimated to exceed $24.9 billion by 2021. The first tweet sold on Twitter for $2.9 million, while the prestigious British auction house Christie's sold a piece of digital art to a man named Pebble for $69 million. This way of doing business is becoming fashionable.
But what about the wine? Wine is a consumer product. What happens if you drink NFT on New Year's Eve? This worries many digital wine pioneers as they search for ways around the illiquid side of the NFT world.
Robert Mondavi has jumped on the bandwagon with a limited line of wines produced at the famous To-Kalon Vineyard. Each of Bernardaud's 1966 ceramic magnums will be included in Clay Heston's exclusive digital artwork sale. Essentially, the NFT owner will receive an exclusive wine, a unique bottle, and a unique piece of art specific to that wine. They will all be connected via NFT and verified using blockchain technology. NFT is a work of art. Private and To-Kalon Vineyard wine tastings are a huge plus.
The transaction must be completed using the Ethereum digital currency. It also contains a lengthy legal disclaimer stating: "You should not purchase NFTs for investment, retail or speculative purposes."
This combination of NFT, digital art, and wine originated in the Pacific Northwest. Andrew Yanwick is a second generation winemaker at Januik Winery-Novelty Hill in Woodinville, Washington. His parents, Mike and Caroline, founded the winery in 1999 after recommending the Ahlberg family and Stillwater Creek Vineyard, a gem run by Napa vintner Ed Kelly, now owned by the American Vineyard District's Royal Slope.
The late Tom Ahlberg has been involved with Amazon since day one, helping to explain the visionary approach to winemaking and early adopters of the technology. Andrew Jenwick and his friend/mobile technology manager Grady Kennelly were the first to see the rise of NFTs in the world of sports. As they prepared for Andrew's limited edition of 100 cases of his "Baba Yaga" wine, named after a witch who lives in a house on chicken feet, they thought it would be fun to launch an animated NFT for the label and include a bottle . wine and special tasting, all for just 18 Ethereum. (This equated to around $245 on September 19.)
In Andrew's words, "It drew attention to a brand you'd never see."
The problem was that many people called and wanted to buy wine with their credit card. This is not how NFTs are traded.
Sales of Baba Yaga's wine were booming. Did they sell NFT? No.
In Horse Heaven Hills, where the Janvik family imports grapes to make their best wines, Mike Andrews and his son Jeff have farmed land that has been in the family since the 1920s. When they transferred ownership of the wine grapes in 1994, they focused on growing exceptional fruit that could be included in nine bottles of Wine Spectator's Top 100 Wines, including Columbia Crest 2005 Reserve Cabernet Sauvignon, Spectator's Number One in the World: in 2009
Last year, when Andrews Family Vineyards introduced Project Trothe with its 2018 Cabernet Sauvignon, it became the first winery in the Northwest to accept Bitcoin and Ethereum digital currencies for wine.
When I spoke to Jeff this summer, he said that the family is still in the research phase of the NFT project.
“We have to make the wine make sense, not just the estate, to make it make sense,” says Jeff.
Whether it's a better vineyard experience or something else entirely, the Andrews family is intrigued.
"We don't want to create a 'technical barrier' for people who also want to enjoy our wine," he said.
With at least seven cryptocurrency apps, all using proprietary and incompatible technologies, Jeff is concerned about the lack of standardization and the many opportunities to confuse his customers.
And he added: "As only 150 cases of wine from the best vines of these vineyards were sold this year, I don't think we will have any problems moving all the stock this year."
All the winemakers I spoke to were also concerned about blockchain and the environmental costs associated with digital transactions.
Digiconomist monitors the energy consumption of Ethereum. A single Ether transaction requires roughly as much energy as the average US household consumes in 5.63 days and has a carbon footprint equivalent to 205,987 Visa card transactions. This is equivalent to the annual energy consumption of Colombia and the carbon footprint of Switzerland.
Given the Pacific Northwest wine industry's interest in sustainability, organic growth, and responsible stewardship of the land, reflecting the concerns of many consumers, these factors heavily influence the future of blockchain and wine, a unless no changes are made to the algorithms.
Does all this mean that Brad Pitt will postpone his NFT plans with Fleur de Miraval Rosé Champagne? Don't count on it. Now, the NFT craze is an exciting way to introduce consumers to the world of wine.
As this channel develops, wineries may also collect a permanent "selling fee" each time one of the NFTs of the wine changes hands.
The world of wine and spirits is still quite fragmented, as is the world of crypto/NFTs. Until there is a more structured and regulated approach, it seems that NFT mining may be more of a marketing gimmick than a new source of income for wineries.
Add to that the currently perceived risks of market volatility and it could all fall into the "What you can, doesn't mean you should" category.
