What is an NFT? Understanding the new technology

If you’ve never heard of NFTs (non-fungible tokens) before, you’ll have to get used to it. These digital tokens are built on the blockchain. They can therefore be collected and exchanged like a cryptocurrency. Their particularity? NFTs are unique and are not interchangeable unlike cryptocurrencies like bitcoin. A specificity which makes it possible to verify the digital rarity and the authenticity of a product. Because NFTs can take the form of an image or a work of art. It is no coincidence that the art world was one of the first sectors to adopt NFTs. In March, the virtual work of crypto-artist Beeple was sold for $ 69 million at auction. A record.

But the fashion and luxury sectors are not left out. London-based crypto sneaker brand RTFKT Studios, which just raised $ 8 million, made more than $ 3 million in March, in less than ten minutes, thanks to a crypto collection in partnership with artist Fewocious. RTFKT and Fewocious not only designed the virtual shoes, but also the digital merchandise called Drip and Charm. Each pair of digital shoes was worth between $ 3,000 and $ 10,000. At the end of 2020, start-up Enjin partnered with Dutch digital fashion house The Manufacturer to develop a virtual collection: a new NFT fashion line inspired by the video game Atari and built using tools from Enjin on Ethereum. The Manufacturer used Atari’s IP to create blockchain-based digital clothing.

In the luxury sector, the use of NFTs is not far either. Gucci confirmed to Vogue Business that it was “only a matter of time” before an NFT was released. Several other brands in the luxury industry are on the verge of releasing NFTs, the British outlet reported. Last month, LVMH, Prada Group and Cartier created a blockchain platform Aura Blockchain Consortium. The goal ? Allow customers to access the history of the product they are purchasing, by means of a digital certificate.

Dual purpose
According to Matthieu Lucchesi, innovation specialist at the law firm Gide Loyrette Nouel, behind the NFT concept lie various realities specific to fashion and luxury. Indeed, NFT can be thought to exist only by being linked to a real product. Hence the certificate of authenticity that we already know during a purchase but which is found digitized with blockchain technology. “The advantage of the digital certificate of authenticity is that its content can be enriched and updated,” indicates Matthieu Lucchesi. “It is a way for brands to regain control of the life of the products they market.” An analysis shared by Alexandre Malsch, CEO of Fulllife, a lifestyle clothing brand for esports enthusiasts. “Authenticity represents the primary interest of NFTs in fashion. This makes it possible to easily link a physical product to a virtual key and therefore to be able to identify a product as not being a counterfeit. This notion of traceability creates value.” The brand, which created its currency FL Coins, is currently under development on its NFT project.

Another application of NFTs in fashion: selling them independently as a digital asset. “Luxury brands are already thinking about virtual universes where their products are put forward in order to target a smaller clientele that is more difficult to capture digitally. These NFTs could have a completely independent existence and could be acquired as as a unique digital luxury item like a bag for example, “suggests Matthieu Lucchesi. Because NFTs offer the advantage of projecting a physical product into a virtual world. Concretely, the bar code on a t-shirt is linked to a token. By purchasing this t-shirt, the customer can find it in a video game but can also have access to online goodies. A sort of virtual reality. “Ultimately, the digital copy of the t-shirt, the NFT, can be resold on specialized sites. Today, we can resell a physical item of clothing on Vinted or resell it virtually on NFT’s specialized marketplaces”, summarizes Alexandre Malsch.