Why Provenance is Important for Your Whisky Investment

What is Provenance

The word provenance is derived from the French word provenir, meaning “to come from”.

But what exactly is provenance?

Alluding to the place of origin of a product, or earliest known history of something, provenance captures the historical significance of a product.

Why is Provenance Important?

When it becomes clear where a product comes from, this proves its authenticity and the value of the item greatly increases. From art pieces to bottles of rare liquors, provenance is important as it enables an item to grow in collectable significance.

The stories of items with captivating stories of their traceable origins can tell of famous owners, significant time periods, fortunes made and lost, empires built and destroyed, to name a few. The boundless possibilities behind the history of each item is what contributes to its actual value, providing something deeper and prized than the physical item itself.

Now that the importance of an item’s origins have been discussed, determining where a piece comes from is nothing short of a complex process requiring a deep delve into historical studies and documentation which may not be easy to retrieve.

And just as how counterfeit products can sell for millions owing to well-imitated supporting documentation, the value of authentic collections can be just as easily undermined. Selling forged art at the highest levels has become a problem in the industry that is serving as a roadblock to unlocking great investment values of prized collectables, often serving as choice alternative investment assets.

Provenance and Whisky

The term ‘Provenance’ has increasingly surfaced within the purview of the Scotch whisky industry. A relatively novel philosophy in terms of its use, its roots remained entrenched within history and geographies of Scotland.

This proud whisky-producing country places differing emphasis on the importance of accepting provenance and the bearing it possesses on the final whisky product. While barley is generally accepted as holding limited significance in contributing to provenance ratings, this also varies from distillery to distillery. Some have been identifying how locally sourced raw ingredients and climate conditions are influencing the quality and value of the end products, leading to the proliferation of Terroir.

While bigger players in the whisky industry have yet to see the importance of provenance as far as production is concerned, there has been a shift towards ensuring that a more cordial position is taken to ensure production techniques and expectations take the origins of the whisky product into consideration, taking steps to embody such ideals.

With whisky investment becoming an increasingly popular alternative investment choice, there is no denying that provenance will always hold considerable significance in the grand scheme of things. The future of Scotch whisky is observing a change, and investigating provenance is a sustainable solution to getting this favoured product out to investors present and future.

Tokenisation as a means to trace the origins of Whisky

Whisky proves its mettle as a good hedge against inflation, regularly proving to be a popular alternative investment choice. The problem is that access to whisky casks is difficult for the majority, and we know now that tracing the origins of the casks is not an easy process. This makes proving the authenticity of the whisky cask a challenging task. With provenance compromised, whisky as an investment choice becomes inaccessible.

Enter blockchain technology, a decentralized and secure system allowing accessibility from people around the entire globe.

The rise of blockchain technology and tokenisation has enabled us to place whisky on the blockchain, creating an easy and trackable process for the investment of whisky.

By representing physical assets as digital tokens distributed on the blockchain, it becomes possible to unlock the value of these assets, exchanging them in real-time. This new tracking process for whisky solves the problem of investigating the provenance and authenticity of whisky casks.

The whisky investment becomes more accessible and its ownership is able to be fractionalised. One no longer has to worry and lose out in life because of the pressures of inflation. Not only will one have access to collectable bottles, one will also have a strengthened investment portfolio.