According to Wikipedia NFT is a non-interchangeable unit of data stored on a digital ledger (blockchain). NFTs can be associated with reproducible digital files such as photos, videos, and audio. NFTs use a digital ledger to provide a public certificate of authenticity or proof of ownership, but it does not restrict the sharing or copying of the underlying digital file.
The desire to collect individual media objects is hardly a new one, but this recent trend in digital media is a highly lucrative format.
But how do NFTs relate to eCommerce?
The digital revolution has changed commerce forever but can blockchain redefine it, redefine how we do commerce, as well as the space and limitations that constrain fashion.
These are exciting times for commerce and fashion, we can find skins and AR components on Snapchat as well as gaming platforms like roadblocks and even more integrated gaming platforms, creating ecosystems for fashion brands.
This interesting development is due to quarantine, social distancing as well as the rise of visual content in Social Media which in turn grew the importance of the perception of our avatar.
In the last 18 months, we have seen a rise in this digital gaming systems as more and more people were unable to leave their homes. We are creating these second worlds where we can exchange ideas, interact and even work.
Technology has given us the ability to dress our image with an item (a digital component) and show it on social media, today we can see, feel the fabric and even capture the way the light hits that garment in a moving image. So digital fashion has a very interesting life span ahead.
Potentially brands and platforms might be looking primarily at digital (establishing a brand-based gaming platform) and then expanding it into physical garments, thereby reshaping and turning the way we think about eCommerce and creating a subculture of fashion trends where we dress as our avatars. We anticipate seeing more and more brands going digital-first in the gaming sphere before they lunch a physical component. The play between the physical and digital worlds as well as the way they will merge is becoming more interesting by the minute.
How do we create value in the realm of NFTs and cryptocurrency in genral ? This past year, more and more people became increasingly aware of cryptocurrency, buying and selling cryptocurrency through the blockchain, some of them became cryptocurrency millionaires.
With that, the need to utilize the currency rises as well. In compresence when you have a currency such as the Australian dollar (or any other international currency for that matter) you can exchange it for goods and services, there is an obvious sense of value and meaning. Whereas in the crypto world it is not the case.
So the question is, where can we find meaning for it, and what are the ecosystems in which it can be exchanged for something of value. An early adopter of the crypto world is a small jewelry boutique with a script ATM where people could exchange and use their crypto to buy a product in-store. How does it translate into the digital world and what are the reincarnations to value creation with cryptocurrency.
This is where ownership becomes essential, the core principle behind the current manifestation of NFT is primarily an accelerated form of ownership. Maybe the closest physical analog is a certificate of authenticity that is intended to verify a physical object is in fact what it represents itself as based on some sort of expert opinion or historical fact.
For instance a Picasso painting stored in a temperature-controlled storage facility, the owner has an authenticity certificate that this is truly an original Picasso, painted by him and no one else at a certain point in his life.
NFT’s uniqueness is verified not by an expert but through the computational horsepower of a blockchain. The unique token (“T” in NFT) here acts to verify the work of art because of its connection with calculated certainty: it is virtually impossible to duplicate the token exactly, and therefore the digital object is authentic by association.
On a social and cultural basis, it is interesting that the painting may never see the light of day, and the owner himself may not even lay his eyes on it, but the sense of ownership withstands, the level of authenticity withholds and people in the community know that this individual owns a Picasso. The concept of “I own” is essentially the idea of non-fungible tokens, this kind of asset class. So we have to start to look at fashion and these other types of arenas in terms of our world what are those limited additions or one-off styles. Or even something from an archive, a digital component that a collector might say “I wish to own that”, and it has no relevance if they can prsent it because owning it has a sense of vanity attached to it.
When we think about the concept of ownership whether it is physical or digital with limited edition and exclusivity at a high price point all of a sudden the ownership becomes a power play.
Because of the massive prices that artists like Beeple have been able to draw for their NFT sales, much of the press coverage has been on sales that amount to exceptional displays of wealth in the style of fine art collection. However, a relevant phenomenon that can be duplicated to the fashion world has begun to appear is large media organizations selling or preparing to sell NFTs targeting the average consumer.
A prime example is Vault by CNN. The Vault platform allows visitors to buy an NFT corresponding to historical footage aired on the network during major news events. These limited-run NFTs come as drops ranging from 500 to 1000 copies. On their landing page, Vault claims to unlock “a new way to own and experience some of those historic moments that changed us and the world” starting at a more reasonable cost of $20-$25. So if we can apply this notion to digital fashion, for example creating an affordable limited edition of the dress/jewelry worn by Princess Diana at her coronation/wedding as a digital component that the buyer can dress his avatar thereby via NFT, we can connect notions of authenticity, nostalgia, and private property.
To summarize Walter Benjamin wrote his famous line: “that which withers in the age of mechanical reproduction is the aura of the work of art”.but maybe NFT can recapture some of that aura and democratize meaning and even ownership.