Using whatever unit of penalty you desire.

Need as many people as there are party members in the FF you are
playing. (As in, a given battle, not total, e.g. FFs VII and VIII are 3,
IX is 4). (If you have less, permanently KO the spare characters)

Everyone picks a character to correspond to them.

One person takes the controller.

Go somewhere you can fight battles, and get into them.

Then, drink when it applies to your character

One unit for taking a physical or magical hit
Two unit for getting in a bad status
Finish your drink if your character is KOd or equivalent (e.g. petrified)
The controlling player finishes their drink and downs another if they lose
the battle
Add others if you can think of them

It's up to you whether friendly fire counts.

After each battle, pass the controller to the next person.

You may want to be switching saves since presumably each person when
playing is going to give themselves the ribbon, mystile etc and everyone
else rubbish stuff.