Bourbon Blockchain – Smiley Pete Publishing

It’s not uncommon for bourbon enthusiasts to boast home bars stocked with dozens of bottles — especially in Kentucky. For some people, collecting rare whiskeys, wines and other spirits extends into the realm of investment. Their collections can be valued in the hundreds of thousands or even millions of dollars, which presents several unique challenges. One is where to store the bottles to ensure their safety and optimal conditions. Another is to value and insure the collection. And then there is managing the logistics of safely buying, selling and exchanging bottles.

Justin Sloan, a longtime bourbon collector and co-owner of Justins’ House of Bourbon [JHOB] in Lexington and Louisville, has helped many clients build, appraise and sell their collections. He recently teamed up with BAXUS, a New Jersey-based blockchain company, to develop a digital solution for managing physical assets.

The recently launched JHOB x BAXUS platform uses non-fungible tokens, or NFTs, and blockchain technology to allow owners to track, manage, sell and trade their liquor easily and securely. Bottles are authenticated through a machine learning algorithm and by JHOB’s expert team, and a high-resolution 360-degree scan is created. The owner is allocated an NFT, the details of which are recorded and verified through blockchain, and the physical bottle is tagged with an RFID barcode and stored in a secure climate-controlled vault. Owners have 24/7 access to buy, sell, trade, hold or redeem individual NFTs.

If a buyer matches the price of an NFT listed for sale and completes the transaction with a credit card, fiat or cryptocurrency, ownership changes immediately and the details are recorded on the blockchain, all while the bottle remains securely stored. Owners can also redeem their NFTs at any time and have the bottle shipped to them as long as they meet the age verification requirements.

“People hear ‘NFT’ and think it’s just a digital image or whatever, but it’s really a proof of concept,” Sloan said. “We’re allocating tokens to tangible assets, and the first asset we’re doing on the platform is whiskey.”

Although using a digital token to represent ownership of a physical object is a relatively new concept, Sloan said the security and convenience of blockchain allows for all kinds of uses — from buying and selling jewelry and artwork to cars, antique coins, rare gems and everything. kind of valuable objects.

“How do you know you own your house? There’s a piece of paper down by the courthouse,” Sloan said. “Well, this is the future of record keeping. Once the NFT is sent, you own the token that says you own that bottle, and at that point you can treat it as a secured asset – you can even leverage that asset against a loan or a mortgage.”

“The idea is for people to be able to log into BAXUS and use it the same way they would use a Charles Schwab account for traditional assets,” said Todd Wiesel, founder and CEO of BAXUS. “You can see where the thing is priced now in the market and all the historical pricing and chain of custody for the asset.”

Wiesel said JHOB x BAXUS (baxus.co) currently has more than $7.5 million worth of whiskey stored in its New Jersey vault. There is currently a 10 percent seller’s fee to set up an account, including storage and insurance of the items.

Wiesel has previously worked as a professional whiskey trader and with a leading brokerage house in the UK. He noticed that when customers bought bottles through him, they often turned around and resold the bottles shortly after, often using his brokerage services.

“That means if I had sent a bottle from New York to Taiwan, then I sent the bottle back from Taiwan to New York to sell it to a guy in California,” Wiesel said. “It’s not good for the liquid, and it’s not good for the environment.” Bottles can also be lost or damaged in transit, held up by customs or contain counterfeit whiskey sent by unscrupulous traders.

“The idea here is that you don’t have to worry about who is on the other side of the deal – everything goes through a trusted intermediary,” he said. “The bottles are stored on our platform; they are all authenticated, secured and insured; and owners receive a digital token, representing ownership of that specific bottle.”

JHOB x BAXUS have partnered with Meta-Sill to offer a wall-mounted digital frame to display high-resolution scans for people who also like to display their collections. Owners can also use their screen, smartphone or computer to display a QR code for quick transactions.

“Let’s say you have another collector come into your office — you can show the code on the screen and they can buy it right then and there,” Wiesel said. “We’re giving people a real use case for blockchain.”