This year, the first blockchain-based artwork was auctioned at Christie’s. Everydays: The First 5000 Days by Mike Winkelmann, also known as Beeple, was originally estimated at $100 and then sold for $69,346,250, establishing him as one of the top three most valuable living artists, along with David Hockney and Jeff Koons. Since then, the market strength of NFT has set the traditional art world in commotion, oscillating between art, historical, and aesthetic questions as to how to categorize such artworks; and questions of economic order, as to how to capture the interest and the spending power of the crypto nouveaux riches.
Following this extremely eager reaction from art collectors, luxury brands have started to leverage blockchain technology and NFTs to invent new forms of engagement.
What does the entry of the most luxurious fashion brands into the metaverse mean for the blockchain market and gaming industry? What is an NFT? Is it necessarily an artwork? What is an NFT game? Why would fashion houses engage with blockchain technology and NFTs?
Have you been racking your brain trying to decipher what NFT stands for? Or maybe you’re considering investing in this new, sought-after asset? NFTs have been on everyone’s lips for the last few months, making the headlines and breaking records of all kinds. If you’re curious to find out what all the fuss is about, this guide is for you.
What is an NFT (Non-Fungible Token)?
NFT stands for “non-fungible token” that is operated, transferred, and verified within blockchain technology. Fungible means that an item can be replaced by another item that is mutually interchangeable. Hence, the “non” within the names of those digital assets (tokens) means that their value is expressed in their uniqueness. Taking the most common example, imagine a situation where you owe your friend $10. When you give back the money, you do not give back precisely the same note with the same serial number. It is highly unlikely. However, imagine a situation where someone lends you their NFT. You must give back exactly the same NFT because there probably isn’t a single second one, like the one of your friend. NFTs engage the art world because of their uniqueness, analogous to the uniqueness of artworks such as paintings, sculptures, etc. They are earning more and more popularity, not only as pricey artworks like those of leading crypto artists, i.e. Beeple, Trevor Jones, PAK, or The Mad Jones, but they are also starting to enter the metaphorical mare liberum of luxury goods distribution. Fashion brands have started to expand the range of their opulent goods into the digital metaverse. Not only are companies, like Louis Vuitton, Gucci, or Burberry, mining their own NFTs, but there are also those, like Balenciaga, that are engaging within the gaming industry. Creating unique pieces of virtual accessories has become a step forward for those brands to attract their customers with the most unconventional and non-fungible luxury. It may also be an attempt to occupy the new generation of potential buyers. An alternative that goes beyond physical objects and entertains the unlimited potential of virtual reality.
What is an NFT game?
An NFT game combines conventional video game design with an unconventional gaming paradigm. Game developers are adapting blockchain technology to provide a more inclusive and immersive experience. Blockchain games, and the assets within those games, allow players to have more controlled participation. Participation in such games becomes more personal, as each element of the virtual metaverse becomes a valuable asset in its own right. Players can claim more ownership than in traditional video games, which directly provides a more engaging dynamic. In blockchain games, any object that is expressed within the created virtual reality can become an NFT, i.e., a gaming avatar, an accessory, a story, etc. If a player decides to purchase such an asset, they claim exclusive ownership over the digital object. The most popular blockchain games merge traditional gaming design and themes with the opportunity to claim an NFT that somehow is a part of virtual entertainment. The ownership of digital assets has become a means for the biggest fashion brands to launch a new branch of selling and defining luxury. The narrative of owning a luxury good does not change so much. Instead of a physical good, we are offered a digital one.
How can we own a Louis Vuitton or Burberry NFT?
We can own it like we own any luxury item. However, the means of claiming the objects vary. For now, Louis Vuitton has released a game called “Louis the Game” celebrating the company’s 200th anniversary, where players can purchase NFTs customised with the emblems of the fashion brand. The purpose of the game is to introduce customers to the new product – NFTs – as well as to enable them to build a personal connection with the brand. Throughout the colorful, adventure-based game, players are able to visit six different metaverses, collect postcards, and claim unique NFTs designed by Beeple. The game can be downloaded on Apple, Android, and Google devices.
Burberry has launched a drop of NFTs in collaboration with Mythical Games company for their “Blankos Black Party” game. Blankos Black Party is an adventure-based game using blockchain technology to allow players to purchase unique digital assets. The collaboration with Burberry was inspired by the company’s Animal Kingdom set of designs. Their NFT within the Blankos Block Party is a game character-a shark named ”Sharky B”. The NFT is available to be purchased and traded within the marketplace of the game’s metaverse.
By introducing NFTs into the genre of luxury products, fashion houses are trying to engage customers with the intriguing environment of gaming, art, design, and blockchain. It is a step into the endless possibilities that non-fungible tokens provide. Digital assets provide a vast scope of creative possibilities as well as great security and financial transparency.
Every transaction within the blockchain technology can be easily traced, hence we can exhibit, borrow, send, or sell our NFT without the necessity of indirect arrangements.
We see that NFT, originally introduced as digital unique artworks, is now being re-interpreted into emblems of designer objects. Their function, however, stays the same. They are nurturing the sophisticated culture of collecting. Even if their range and dimensions go well beyond traditional objects of collectors’ desire, they correspond to the very same old wish of claiming and establishing one’s cabinet of wonders.
Special thanks to Robin Buchholz for the blockchain market insights
