What is Bitwine and How Does it Work?
Anish Patel @ 2022-05-12 00:06:39 -0700
NFTs are on everyone’s mind, and as of last year, they’ve even made their way into the wine industry. If you’ve heard of Bitwine, you know that wine has inspired a whole new way to collect wine. But there is one catch: these digital collectibles are wine-inspired pieces of original art. You can’t drink them!
If you’re confused, don’t worry, we’ve got you. We’re going to tell you exactly what Bitwine is and what this means for you.
What is Bitwine?
Bitwine is a Toronto-based company that has released 1000 original digital collectible items in groups of 50 at a time. The company is made up of sommelier Lauren Vaile, pixel artist Stephen Osborne, and marketing leader Evan Keast. The product is 1000 NFTs inspired by real wine around the world, ranging from common to rare to “legendary”.
You can purchase them on OpenSea, a trading marketplace where you can trade anything found on the Ethereum blockchain or Polygon Sidechain. You can purchase all kinds of NFTs on OpenSea—art, digital land, and other collectibles. And now you can purchase Bitwine.
When you land on the Bitwine page for OpenSea, you’ll find a familiar site that doesn’t look unlike other online wine stores. Bottles of wine line the page, their current value displayed in the corner of each bottle. They have natural wines, old world wines, new world wines, fortified wines, sparkling wines, and even magnums. These wines are attributed to vintages and real-life regions like Wachau, Australia, and Rioja. But they’re also given their own descriptions regarding acidity, sweetness, tannins, alcohol, and body.
Surprisingly, the details don’t give a flavor profile, so it’s up to you to know what to expect from each region and vintage.
The only difference? If you buy, you’re purchasing a piece of original digital art. You’re not purchasing an actual bottle of wine. But for collectors, that doesn’t matter, because Bitwine has value.
So what’s the value in Bitwine?
There’s something alluring about this and it certainly appeals to the collector. For many wine enthusiasts, the collecting aspect of the hobby is as thrilling as the drinking. How much fun is it to find a rare bottle and add it to your cellar?
Each NFT is also a chance to own a piece of original art. For example, BitWine #979 is described as a 1995 Traditional Method Sparkling Wine from Champagne. The pixel art was a collaboration between Bitwine and graffiti artist TeoKayKay who has worked with several real-life Champagne houses to design custom bottles.
It’s currently valued at .06 ETH. That’s $1,852.42, by the way. If you’re cringing at the thought of spending almost 2k on a bottle of wine you can’t drink, you may want to stick to the wine shops. But for many, these pieces of original art have become a new, exciting way to trade. And it turns out, there’s a market for it at the moment.
Still, Bitwine and the world of NFTs are new and are experiencing a kind of gold rush at the moment. The first Bitwine was purchased on April 10, 2021 for 16 ETH ($34,000). Today, there are some collectibles that are garnering astounding value. Here are a few:
- White Rioja: 10 ETH ($29,928)
- 2020 California Red Blend: 55 ETH ($170,365.80)
- 2020 California Merlot: 195 ETH ($604,024.20)
Need us to back up? Let’s go over the basics of what an NFT is so that you can understand Bitwine better.
NFT stands for non-fungible token. Non-fungible means that it is a unique asset that can’t be interchanged with a similar item.
To understand this, let’s look at what fungible means. Fungible means an asset that can be exchanged for something else, and it will hold the same value. Say you order a scarf on Amazon and it arrives with a big tear running through it. You contact the seller and they replace it with another scarf without a tear. No problem, right?
The scarf is fungible; it can be easily replaced because the manufacturer has made many scarves that all hold the same value to you.
Now say you purchase a vintage, brand-name scarf in a consignment store. When you get home, you realize that there’s a large tear in it. You can’t bring it back to the consignment store and exchange it for a different scarf, because this scarf is one-of-a-kind. It is non-fungible.
Non-fungible assets hold a unique value, unlike others in their category. They often refer to collector’s items like paintings, original books, clothes, or toys.
A token means a digital certificate stored on a blockchain. Essentially, it’s a digital item that is verifiable; a very secure form of currency.
Bitwines are non-fungible-tokens because they’re unique collector’s items that exist on the Ethereum blockchain. In other words, they’re digital collectibles.
What is a blockchain?
Now that you understand NFTs, unique digital items on the Ethereum blockchain, you may need a rundown of what a blockchain is. We’ll make this quick and painless, so stick with us.
The blockchain is a means through which every computer can communicate and publicly record every transaction that happens. It is potentially an alternative to banks, which privately track every transaction you make with your debit cards and communicate with each other to verify ownership.
Instead, the blockchain records everything on public record so you can go back and see every purchase and sale. In this way, any NFT existing on the blockchain carries a stamp of authenticity that can’t be tampered with.
How do we decide the value of Bitwine?
How Bitwine has value can be looked at in the same way that we look at how art has value. In short, we decide what is and isn’t valuable.
Bitwine is created by a world-renowned pixel artist, so each one is a collector’s item. The collection was meticulously researched by a sommelier and each Bitwine was created to reflect iconic wines actually found around the world.
A famous example of how we assign value to digital items is the first tweet ever made. It was tweeted by none other than the CEO of Twitter and it reads simply, “just setting up my twttr”. Nothing too profound about that, unless you consider the social, political, and historical context in which Twitter and social media have changed the world. The tweet was made into an NFT and sold for $3 million.
Would you pay $3 million for a tweet that you can hop onto Twitter (or Google) and see for free? Maybe not, but the blockchain is able to verify that the ownership of the original tweet belongs to blockchain entrepreneur Sina Estavi. Go Sina.
You can think of this like the original painting versus the print version. The original is much more valuable, but you may only be able to afford a print.
If this is getting a little philosophical for you, that’s because it is. Beauty is truly in the eye of the beholder, and throughout human history we have decided what is and isn’t valuable, from fashion to music, to art, to wine.
Is Bitwine for me?
If you’re new to NFTs, be sure to do your homework before you start trading. Cryptocurrency is no different from anything else in the financial world in that you need to understand the whole picture before you jump in. There are tons of resources out there to help you get started in the world of trading, so take your time learning about the marketplace.
One thing to consider if you’re thinking about investing in anything is the environmental impact of your actions. If you’re a lover of natural wine, sustainability is important to you, you may find with a little research that NFTs might not be in line with your values.
This is because blockchain technology uses an incredible amount of energy from fossil fuels. In order to operate, computers are processing transactions 24/7, pretty much until the end of time. Ethereum uses as much power as the Netherlands. That’s a pretty big problem for the climate. And while it has pledged to reduce how much energy expenditure by 99.95%, it hasn’t actually done that yet.
Nonetheless, Bitwine is an interesting take on rare wines around the world.
Are you looking for something to sip on while you shop for Bitwine? Try Monje, an orange wine with notes of tangerine zest and pepper. Made with organic grapes and low sulfites.