Breaking Down NFTs, Digital Art, Blockchain Technology for the Fashion Crowd
The $69.3 million sale of one of Beeple’s digital works of art at Christie’s is only a microcosm of the might of NFTs.
Inevitably, a book about NFTs, blockchain technology and cryptocurrency could not be completely of-the-moment upon completion. Record-breaking sales for
NFTs and the value of cryptocurrency are ever changing.
Marc Beckman spells all that out in his new book “The Comprehensive Guide to NFTs, Digital Artwork and Blockchain Technology.” As founder of DMA United and co- chair of New York University’s Stern School of Business Luxury and Fashion Council, the author has written a primer, which also speaks to how fashion, art, sports and social justice can take advantage.
Illustrated with NFTs and photos of digital-savvy personalities like Takashi Murakami and Steve Aoki, the page-turner highlights the rise of NFTs, digital artwork and blockchain technology.
While some may associate NFTs with Christie’s sale of artist Beeple’s $69.3 million digital file in March, the book pegs the November 2017 rise of NFTs to CryptoPunks and CryptoKitties. Beyond Beeple’s whopper auction price, the value of his NFT and any other is that they are a digital file verifying the maker and tracing back ownership to its creation. Beckman repeatedly reminds readers that they cannot be altered, copied or forged, and the risk of theft is next to nil.
Beckman also breaks down how blockchain, “the mechanism that underpins cryptocurrency and NFTs, is advancing the technology used to verify who created something and who owns something (digital or otherwise).” With blockchain, the ownership history of a piece is baked into the currency history and is accessible to anyone who looks at it. The author compared it to a “living ledger that grows each time it’s used,” or taking a dollar bill out of your wallet and knowing everyone who ever touched it.
Readers will learn how the blockchain that runs Bitcoin was created by the “mysterious person or persons” Satoshi Nakamato, who devised a way that the history of each Bitcoin could be verified with a digital time stamp. And all Bitcoin transactions would be decentralized and maintained by a network of computers around the globe that would “mine” Bitcoins, effectively maintaining the chain of transactions in the Bitcoin ledger and periodically being rewarded with new Bitcoins for the effort.
In a recent interview, Beckman said his agency has been consulting fashion and lifestyle companies about NFTs, digital art and blockchain technology, as well as building its own platform, for nearly two years. The book’s concept was developed in March 2020 and is geared for people in the fashion industry “who want to get a baseline of knowledge as it relates to cryptocurrency, digital art connected to NFTs, the different mechanisms that NFTs can bring to marketing, brands, products and ideas for how nonfashion sectors can harness this new technology.”
His definition of the metaverse is “the digital realm at the core, a place where your digital identity could come to life with digital assets that you purchase and own.” That should include your digital wardrobe, cosmetics, different digital environments and other elements that allow that digital identity to come to life, Beckman said. The metaverse could include movie premieres, concerts, fashion shows and retail experiences. There could be a crossover into the physical world if a metaverse purchase allows for a redeemable experience in the physical world, he added.
From a brand perspective, companies can build their own metaverse or go into a third-party digital realm like one in Roblox and Minecraft. The latter is very beneficial since it takes less time for brands to build and is less expensive to enter the metaverse that way, Beckman said. Brands’ incarnation in the metaverse can be completely different than how it lives in the real world. Basic branding like logo, name and color theory can be different, as well as behavior and product offerings. “Brands in the metaverse can be riskier with their appearance, more daring with their affiliations and certainly more innovative,” he said, giving the example of brands coming to life in gaming such as Balenciaga in Fortnite, or via exclusive new product offerings in the digital realm as Gucci has done.
The digital art collective Bored Ape Yacht Club’s recent deal with Universal Music Group to launch a band made up of four BAYC NFTs intrigued Beckman by creating a franchise that extends beyond art, while simultaneously increasing the value for holders of the artwork.
The burgeoning sector is spawning new businesses, exclusive experiences and product drops practically by the minute.
Based on daily conversations, Beckman said the fashion industry still has a lot to learn about how NFTs can create new revenue streams, “incremental commercial growth plus serve as the core of a marketing engine.” With the way that collaborations are part of every chief marketing officer’s bag of marketing tactics, “there’s no doubt that Web 3.0 is going to bring an equally powerful tool through blockchain technology, NFTs and other digital assets [for] apparel and accessories,” he said.
Overall, he thinks people should know that because the technology is superior, it’s here to stay. Brands should be looking at the metaverse with fresh eyes and that the way a brand comes to life in the decentralized world of the metaverse shouldn’t be how it comes to life, looks, feels and behaves in the physical world.
Brands need to start putting together a blueprint that charts out how their brand looks in the metaverse versus how it behaves in the physical world.
While most people in the fashion community (and elsewhere) don’t fully understand the potential of NFTs and associate it primarily with digital artwork, NFTs can also have utilitarian functions such as unlocking exclusive redeemable benefits such as limitededition merchandise, access to live events, unique experiences and services, Beckman said. “That’s where the industry needs to start focusing if they’re going to create true economic and marketing values for brands.”
As for how all that stored information and calculated marketing and customer service could affect spontaneity, Beckman said the technology provides the user with a certain amount of spontaneity. He gave the example of how one client wanted to communicate immediately with purchasers of a NFT, a message was Air Dropped directly to those consumers through their wallets.
While marketers are vacuuming up all kinds of consumer data and catering deals, exclusive products and experiences accordingly for individuals, he said, “They can. There’s no doubt that right now the fashion industry and others aren’t using the technology to the fullest effect as it relates to capturing and using that kind of consumer data and beyond.”
As companies potentially stand to make a significant amount of money, consumer privacy is another factor to consider. “Unless the individual opts in and provides more information with the corporate partner beyond what they’ve shared through the NFT transaction, like their email address. The company wouldn’t be able to breach the identity or demographically data of the individual,” he said, referring to a traditional purchase of a NFT.
He dismissed the idea that the technology is dictating what individual consumers will like, as opposed to the person defining their own choice. Brands can use NFTs as rewards for consumer behavior for brand interaction similar to how many users of Nike’s running app are incentivized by getting badges or shields for select runs or mileage goals, Beckman said, adding that such rewards can be done off-chain, too. However, off-chain there is less opportunity for continued storytelling.
Beckman’s book, which is available on preorder, noted the might of the digital basketball collectible platform NBA Top Shot. Since being offered to the public in October 2020, it has reportedly racked up nearly $800 million in sales with users buying and trading digital collectibles of NBA highlights.
Brands that are interested in diving into NFTs, digital art and block generate should develop strategies that create new streams of revenue and a new communications platform, while staying true to the brand’s core values, Beckman said.
As for the instability of cryptocurrency, Beckman said: “It doesn’t make me nervous personally because I’m looking at it like a long-term initiative and the technology at the core is superior. Right now there’s no doubt — it’s undeniable — cryptocurrency is very unstable. In the past five days, Bitcoin and Ethereum went through steep drops and are starting to climb back up again. It’s part of the dynamic of the industry.” (Separately, Ethereum’s scaling start-up Mir was acquired by Polygon for $400 million.)
Despite the inherent instability in cryptocurrency, Beckman advocates for programs that could build brand awareness, customer loyalty and open up positive experiences with a long-term vision. Fashion brands should expect to spend “low six digits” to put together a comprehensive NFT program, Beckman said. While the media covers blockbuster NFT sales such as the Christie’s auctions, most consumers can get some fantastic artwork for a few hundred dollars, according to Beckman.