What are NFTs?

Unless you have been locked up in a dark room with no online access – then you can’t have missed all the many discussions in the fashion industry about NFTs. But do you actually understand what they are? The term blockchain has been around for a long time, but now most conversations talk about NFTs instead, which is causing some confusion. 

An NFT stands for Non-fungible token.  Fungible tokens are things like a US Dollar or cryptocurrency  tokens such as Bitcoin, Ethereum, and MANA because one token can be exchanged for any other token. Non-fungible tokens are blockchain assets that are unique, that can’t be replaced by something else. For example, a movie ticket is a non-fungible token, as it is a ticket for a specific movie at a very specific time. Or another example is is the deeds to a house, which prove history and current ownership. 

For fashion brands, a NFT is the way to record and authenticate limited edition pieces or collectable items such as designer pieces. But also as we move more into the digital space and more brands are focused on creating and selling digital items, either for your avatar or as collectibles, NFTs mean that you actually own that item and can resell it in the future. 

NFTs allow designers and brands to protect and make money selling digital items that would otherwise be free and easily replicated. The blockchain creates a digital record of the price and ownership, which is then stored and maintained, making it impossible to forge. A huge bonus for creators is that NFTs can also contain contracts within the data that enables them to get royalties in future sales.

Fashion hasn’t yet fully embraced the phenomenon, but when they do it could potentially shake up the industry.