One of the leading footwear brands in the world, Nike has patented tokenizing shoes as a non-fungible token on the advanced Ethereum blockchain, with a token called "CryptoKicks". The patent for the crypto asset signed last week describes how the crypto asset for the footwear can be used and how an Ethereum token (ERC-271 or ERC-1155) can be used to authenticate as well as transact the physical shoes. The global sneakers market stood at $58 billion in 2018 and is projected to top a jaw-dropping $88 billion by 2024, on account of increasing participation of growing consumer inclination towards branded and high-fashion footwear.
As previously reported on the Dragon Blog, the fashion industry was one of the first industries to explore Blockchain’s ability to bring accountability and transparency. Purchasers of luxury or collectable goods are demanding sustainability and supply chain visibility, and Blockchain is, of course, the ideal tool for this. Track-and-trace technology can be used where the digital identity of goods are given a ‘digital twin’ through attaching a cryptographic seal or serial number recorded on the Blockchain which is similar to the approach taken by Nike.
On the Ethereum network, Nike’s token would have to be unlocked by initially purchasing a physical shoe, after which buyers will have to link a 10-digit identification key to their identification code. This system ensures that the products are authentic and not counterfeit. According to the patent, people will soon be able to buy highly sought-after footwear from vendors close to them. Once the purchase is complete and the shoes are delivered, the new owners simply open the box and scan the code with the barcode feature on an app downloaded to the buyer's smartphone device. These measures ensure that prospective purchasers obtain only original Nike branded footwear.
The patent states that when a consumer buys a pair of genuine branded Nike footwear from any vendor, the digital representation of the shoe may be made available, linked to the buyer, and also assigned a cryptographic token. When this happens, the cryptographic token and the digital shoe represents the CryptoKick. Nike, has a head start with their use of the Blockchain and is looking at opening up new revenue streams by engaging with users of digital currencies, but will they be able to maintain this lead when other brands get off the starting blocks and join the race? Only time will tell but of course, we'll bring you all the latest news as it happens right here on the Dragon Blog.