But how does it work, and what exactly do customers get out of it?
A price of $2.5million USD was paid for a magnum bottle of Château Avenue Foch from 2017 when it was auctioned last year. Don’t be surprised if you are unfamiliar with this Champagne producer, because the most expensive Champagne bottle in history to date is less about the sparkling contents than the whole shebang.
In this case, the container is key, i.e. the vessel itself. Illustrations of so-called ‘Bored Apes’ are printed on it; drawings of cartoon monkeys generated by an algorithm and executed by a computer. Behind this is the Bored Ape Yacht Club, one of several projects of an American company estimated to be worth four billion dollars. The business model behind the Bored Ape Yacht Club works in such a way that there are a total of 10,000 different Bored Ape monkey illustrations, all visually different from each other, which are sold to well-heeled interested parties (Madonna is said to own a ‘Bored Ape’, Justin Bieber and Gwyneth Paltrow likewise). So, the computer-generated drawings basically represent 10,000 unique digital works of art, sold in the form of NFTs – digital proofs of the uniqueness of the artworks (more on that later).
The $2.5million Champagne consists on the one hand of 1.5litres of French noble bubbly, and on the other the NFTs for the printed monkey illustrations that one buys at the same time (the prints on the bottle are no more than reproductions of these works of art, just as a poster of the Mona Lisa is only a reproduction of da Vinci’s original).
But it was deemed worth this sum to a pair of Italian investors, Giovanni and Piero Buono, who do not hide the fact that they only bought the Champagne for speculative reasons: “We do not intend to drink it, but hope that the bottle will increase in value.” The chances of this happening are not bad at all, because a real hype has developed in recent years around NFTs, the digital proofs of ownership for all kinds of goods, in which producers of fine wines and luxury spirits are now increasingly wanting to participate – just like the Champagne house Avenue Foch. However, the individual suppliers are taking very different approaches.
What are NFTs and tokens?
In order to better understand the growing importance of NFTs for the wine trade, the most important terms used should first be defined. Both NFTs and tokens originate from the world of cryptocurrencies, i.e. those purely digital assets that – mostly on the basis of decentralised databases distributed over many individual computers (blockchain technology) – primarily function as speculative objects, or money-like objects of exchange. Almost any digital capital or asset is referred to as a token. Some tokens can be exchanged at will on the internet or used to pay for services or goods because they always retain the same value. Such tokens are called fungible or exchangeable. On the digital side, bitcoins are among them; in analogue life, euros would also be called fungible because they are always worth the same amount – ten euros are ten euros, whether in a banknote or in ten one-euro coins.
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