First whisky-based cryptocurrency launched

The “world’s first” whisky-based cryptocurrency, called Cask Coin, has launched, giving investors the chance to own a share of a £40 million Scotch whisky portfolio by investing in its digital coins.

Described as an “asset backed cryptocurrency combining blockchain technology with a physical asset investment in the form of maturing Scotch Whisky”, CaskCoin has been founded by Ricky Christie – the the boss of the North of Scotland Distilling Company.

Each coin translates to physical ownership of a share in every cask of maturing whisky in the portfolio, which the company says includes old and rare malts aged between 21 and 50 years.

CaskCoin’s initial coin offering (ICO) will look to raise more than £40 million and runs between 12-30 March. A total of 6.5 million ERC-20 tokens will be available, with Cask Coin promising never to increase the number available, at a cost of £8.15 each, with a minimum investment of £30,000 paid in bitcoin or ether.

“Whisky is an interesting alternative to traditional or even the alternative SWAG (silver, wine, art and gold) investing,” CaskCoin explains on its website. “It has several interesting characteristics; It does not go off like wine, but can still be consumed, unlike gold and silver.

“Unlike art, once it is consumed it cannot be consumed over again. Whisky offers an investment vehicle which could increase over time. Until recently investing in whisky was something reserved for the few, it took time, knowledge, know-how and expertise. With CaskCoin some of those challenges have been simplified.”

WHISKY INVESTMENT

CaskCoin follows the launch of the world’s first publicly traded whisky fund – The Single Malt Fund – by Swedish entrepreneur Christian Svantesson, which The Single Malt Fund gives investors the opportunity to own a small part of a large collection of rare and limited-edition whiskies, selected by five portfolio managers, with the added bonus of being able to buy single bottles from the fund’s online inventory.

Unlike CaskCoin, the Single Malt Fund offers investments in traditional currency, across an evolving portfolio.

“It’s essentially a commodity fund, but instead of gold, we buy liquid gold,” Svantesson told Business Insider at the time of its launch. “Through the fund, consumers can invest and save money in a regulated way, in what for many of them is their greatest passion: single malt,” he added.

It’s a further sign in the interest in old and rare whiskies, particularly those from Scotland and Japan, with their investment proving increasingly lucrative. According to Fortune, over the past decade, the return on rare whiskies has been roughly 25% and the world’s 100 most valuable whiskies have gone up in value 447% since 2010.

CRYPTOCURRENCY 

While investment in whisky is a hot topic, with the value of rare whisky trades through auctions and stored in bond soaring, the volatility of cryptocurrencies is another matter.

A cryptocurrency is a form of digital currency acquired though digital mining using a specialist computer, or bought through brokers. Sophisticated encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, with the key benefit being that it operates independently of a central bank.

Bitcoin is the most recognisable cryptocurrency, which saw a boom in its value in December 2017 as its value stormed to a record high of $19,850 (£14,214) in the run-up to Christmas, making millionaires out of its early investors, however its value has since dropped back to $10,000 (£7,190).

It’s popularity led to the launch of a number of crypto competitors, including ethereum, litecoin and ripple, as well as several asset-backed cryptocurrencies, including one launched by Venezuelan President Nicolas Maduro, called the Petro, based on investment in oil, which was used to offset taxes, as well as the most recent whisky-based CaskCoin.

But despite their growing popularity, cryptocurrencies remain volatile and their reliability untested.