Non-fungible tokens (“NFTs”) are permeating markets from left to right, from the entertainment industry to the art world. The fashion world is no exception. This article provides a brief outline of what an NFT is and how they’re being embraced within the industry.
What is an NFT?
NFTs are a digital certificate verifying the holder’s ownership of a digital asset. NFTs utilise blockchain technology, a decentralised database designed to record information in a way that makes it difficult for hackers to obtain or change the information.
NFTs are defined as being ‘non-fungible’. A non-fungible item has unique properties and cannot be interchanged with another item like-for-like. A ‘Fungible’ item, on the other hand, is something with units that can be interchanged for something of equal value, for example, money.
Recent NFT craze
So, why are these digital certificates all the rage?
With the emergence and rise in popularity of new digital content platforms from Instagram and TikTok, Facebook and Youtube, the value of the digital content being uploaded on those platforms has increased. The ability to protect and monetise that content is crucially important for the continual success and vitality of the creators of such content.
NFTs are one such way for content creators to monetise their content and profit from its popularity. For example, the NFT for the infamous “Charlie bit me” Youtube clip was recently sold for £500,000.
NFTs x Fashion
The fashion industry has also responded to the rise in interest and intrigue in NFTs, with multiple well-established fashion brands utilising NFTs for various purposes.
Burberry, in partnership with Mythical Games Inc., has launched an online multiplayer game, “Blankos Block Party”, in which players can collect and sell NFT toys and accessories. One of the benefits provided to those not only the fashion world but in virtually every industry is the ability to market a brand through products sold via NFTs, as in this case.
NFTs are also enabling brands to generate another source of income through an alternative revenue stream. We’ve seen fashion brands sell virtual fashion items as NFTs, for example, Gucci’s digital trainers, which are being sold at $12 apiece.
The lower price point of these virtual items in comparison to their real-life counterparts suggests that this alternative revenue stream could become as popular as fashion brand’s lines of ancillary products, consisting of accessory products, perfumes and cosmetics, by appealing to a wider range of consumers than those solely purchasing the actual fashion items themselves.
Fashion brands’ utilisation of NFTs has been strikingly innovative and the benefits being reaped through such use suggests that it isn’t a trend that’s going away any time soon. It will be interesting to follow the development of the fashion industry as the use of NFTs becomes more commonplace – maybe we’ll be in for four seasons of fashion collections available for purchase as NFTs very soon.
Fashion / Finance
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