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Cocktails

Crypto Cocktails Have Arrived

July 06, 2021

Story: Kara Newman

art: Carolyn Figel

Cocktails

Crypto Cocktails Have Arrived

July 06, 2021

Story: Kara Newman

art: Carolyn Figel

With the advent of the NFT gold rush, will bartenders finally find a way to own their recipes?

In April, Quality Eats sold a cocktail for 0.75 ether, or about $1,400 at the time. That’s a lot of money for a drink made entirely of pixels. Into the Ether, as the drink is called, is a nonfungible token (NFT) cocktail—just one within a fast-growing global trend.

Investors and collectors have been quick to jump into this heady world. In March, Christie’s auctioned an NFT of graphic designer Beeple’s The First 5000 Days. It sold for $69.3 million, making headlines and sparking an NFT bubble. The food and drink world has likewise wasted no time jumping on the NFT bandwagon, often for nothing more than marketing opportunities. Pringles sold a digital image of a golden “CryptoCrisp” canister, for example, while Taco Bell offered “NFTacoBells”: taco-themed GIFs, which sold for the equivalent of $18,000.

But bartenders are taking a slightly different view of the opportunity that NFTs can provide, using them to raise funds for the battered hospitality industry as it emerges from the pandemic—Quality Eats donated the purchase price of Into the Ether, created by bar director Bryan Schneider in partnership with Angel’s Envy, to ROAR NY in support of restaurant workers affected by COVID-19. Down the road, bartenders could use NFTs as a way to potentially claim ownership of cocktail recipes. This feat is notoriously difficult, because copyright law does not protect recipes, which are considered facts, as it does creative works like art or literature, while trademarks can protect only the name (the “mark”) of a drink against unauthorized use. Still, some bartenders view NFTs as a workaround to protect their intellectual property.

“Minting a drink is kind of like copyrighting it,” says Saeed “Hawk” House, a Los Angeles–based bartender who also makes and sells cocktail NFTs, which include retro-stylized pixelated images and original drink recipes that can be unlocked once the NFT is purchased. “Minting it is a way of putting it out there and saying, I own it.”

In brief, NFTs are considered one-of-a-kind items, like a rare baseball card or a piece of art—or, as some bartenders claim, a unique drink recipe. In addition, these items are digital, which means they can be sold on a blockchain platform like Bitcoin or Ethereum for exchanging cryptocurrencies (they use bitcoin and ether, respectively). The same systems that guarantee the security of Bitcoin transactions can also be used to verify ownership of that digital content. When someone “mints” an NFT, they create a file that lives on the blockchain. That file can’t be copied, edited or otherwise manipulated.

One of the most ambitious NFT projects of the moment is at Oslo’s Himkok. On July 1, the famously experimental bar and microbrewery dropped an entire cocktail menu as an NFT, intended as a fundraiser. Himkok partnered with Norwegian illustrator Esra Røise for an NFT version of 13 drinks. Each NFT includes a certificate for Røise’s digital artwork, a physical signed copy of the art and a range of “unique experiences,” such as distillery visits or a session with a master blender, furnished by brands including Michter’s, Cointreau and Martini & Rossi. Opening prices were between 0.5 and 1 ether (about $1,140 to $2,282).

The project was in the works for six months, run by Røise, Himkok flavor developer Paul Aguilar Voza, Himkok head bartender Maroš Dzurus and Nassim Olive, partner at Eterna Capital. The way the organizers see it, this sort of event is more than just a fundraiser or gimmick; it represents potential new revenue streams for bars, and experiential opportunities for guests.

“If you look at our project, surrounded by these amazing talented people, it combines our knowledge, our brands, the consumer,” Voza says. “It’s not a stunt. It’s an experience.”

The NFT could be a way for the bartender to say, here’s the definitive recipe and here’s how you can and can’t use it.

They are also hopeful the NFTs will be a kind of souvenir that lasts long after the in-person experiences are done—a touchpoint, the way some bargoers prize matchbook collections. Every time the owner of the NFTs looks at their digital artwork, the creators hope it will spur fond memories. “Selling art is selling the artist, or the feelings people have from art,” adds Dzurus. “This combines the hospitality part for bars.”

Thirty percent of the funds raised by the auction will be used to reopen Himkok, which has been closed for eight months and is tentatively slated to reopen July 13, and 25 percent will go to the artist. In addition, 10 percent of proceeds will go to a mental health charity and an additional 5 percent will benefit a local charity, likely one with an environmental impact, the founders say. The remaining proceeds will go to the founders and cover administrative costs associated with the project.

Similar to Himkok’s offering, bartenders are enticing NFT buyers with experiences that extend beyond the digital artwork. For example, the Quality Eats NFT includes the recipe for Into the Ether, an original drink showcasing Angel’s Envy rye (“I’m the only person who knows the recipe, [besides] the person who owns the NFT,” Schneider says), one dinner for six at either current location of the restaurant, and one free Into the Ether per visit at any current or future Quality Eats location, “good for the life of the restaurants.”

Though he had seen bartenders releasing art as NFTs, “I hadn’t seen anyone releasing them as actual physical cocktails you can drink,” Schneider says. The NFT was posted on the Openseas platform, where it stayed idle until the last 36 hours. “We just threw it up on our social media and Hail Mary’d it,” he remembers.  A last-minute bidding war among three people ended with the NFT going to a bidder in California, who has the rights to re-sell the NFT if desired.

Looking ahead, the bar world is bubbling with ideas for using NFTs to monetize cocktails and attempt to secure them as intellectual capital. Few are ready to disclose the behind-the-scenes details of how that revolution would take place, but potential for locking in drink recipe “ownership”—and related profit—is massive, they assure.

For example, Schneider points to modern classic cocktails like the Penicillin or the Cosmopolitan, and the many variations that have sprung forth from each. “The NFT could be a way for the bartender to say, here’s the definitive recipe and here’s how you can and can’t use it.”

Voza echoes this thought: The same technology used to implement blockchain could be used to upload and archive recipes for future generations. “It’s a way to prove they were the original creators of cocktails.” In essence, this documentation could prevent the inherent murkiness that has clouded so much of cocktail history in the past. Looking up the inventor of a cocktail could be as simple as checking the blockchain.

It’s unlikely that the creators of cryptocurrency had rubber-stamping drink recipes in mind when they developed this evershifting digital marketplace. But that may be the golden ticket, minted into NFT form.

“The authentication of recipes in lieu of legal patents for recipes is the most interesting thing [about NFTs], and how the cocktail community can employ that technology,” Schneider says. “We’re at the tip of the iceberg on that.”

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