At a recent auction, a combination sale including a jeweled physical crown coupled with a digital non-fungible token (NFT) version sold for more than $1 million. Meanwhile, custom-made digitally wearable Dolce & Gabbana jackets attracted more than $300,000 bids in the digital currency Ethereum. It’s part of the growing interest in NFTs, a record of a digital item confirmed by a blockchain platform. “Virtual clothing is not real and can not be worn,” Kevin Mirabile, a professor of finance and business economics and an expert on alternative investments at Fordham University, told Lifewire in an email interview. “It can, however, be shown in virtually fashion shows and displayed on websites or venues. Hence it has usage cases and value.”
Going, Going, Gone
Italian fashion brand Dolce & Gabbana recently completed its first NFT collectibles auction and brought in about $6 million. In some cases, bidders won physical pieces of apparel or jewelry, as well as the digital version. While digital clothing has been around for a decade, it wasn’t viable as an investment until blockchain technology provided provable provenance and ownership, pointed out Dorian Banks, CEO of Cover Technologies, in an email interview with Lifewire. “Now that NFTs [are] becoming more known, virtual clothing sales have migrated that sales and ownership technology,” he said. “Recently, there have been pairings with ‘in real life’ versions of the clothing too.”
New Ways to Spend Money
But why are people spending real money on virtual items? “Digital clothing may not have any utility whatsoever, but what real-world utility do the artworks of Leonardo da Vinci have, or, for that matter, retro video games?” Kunal Sawhney, CEO of Kalkine Group, told Lifewire in an email interview. “These are all collectibles, the beauty and value of which lies in the eye of the beholder.” As in the real world, virtual clothing can be a display of glitz, glamour, and bling, said Michael Eckstein, CEO of AllCertified, an NFT platform. “Characters in video games and on other metaverse platforms can secure bragging rights wearing virtual clothing either paid for or earned, to separate themselves from the virtual masses wearing less-than-glamorous clothing and accessories,” he said. Virtual clothing is becoming more of a digital asset investment than a fashion investment. “It allows buyers not just to own the product, but also the supply chain and sourcing history,” said Meysam Moradpour of Web3 Innovation Lab, which makes NFT apparel to wear in the metaverse. “Virtual clothes don’t wear out, get dirty, or get lost in closets. Virtual apparel allows buyers to trade them for a profit much easier than current second-hand marketplaces where shipping, packaging, and proving authentication are annoying by-products of the sale.” Both real-life clothing labels and independent designers are catching on to this trend. “It’s always been possible to purchase virtual clothing and jewelry, but with NFTs uniqueness and limited editions of virtual clothing can cost huge amounts of money,” Eckstein said. The boom in virtual clothing will probably accelerate, observers say. “Watch [as] the market for more elaborate, unique, and custom-ordered virtual clothing and accessories [continues] to grow,” Eckstein said. “In the not-too-distant future, designers will be commissioned to create one-of-a-kind NFT fashion pieces on demand and tag their uniqueness with blockchain technology, from people willing to spend huge amounts of money to wear and flaunt these pieces.” Moradpour predicts that virtual clothing in the future will be a multi-dimensional asset, with buyers able to wear and trade virtual clothing in the metaverse and also unlock exclusive access. “Think about a Gucci bag that grants you access to a special fashion event, a tour of the factory, a meeting with Gucci execs and insiders,” he said. “Virtual clothing can also be ’tokenized’ in a way that grants buyers voting rights to determine the creative direction of a brand they love.”
