Digital duplicates of all non-edible consumer goods will be commonplace in the next decade. There will be NFTs,”
William Quigley, the co-founder of the company Tether, has made this bold assertion.
So, what exactly is a digital twin, and why is it included here? What we call a “digital twin” is a digital replica of a real item. It essentially provides for a digital record of physical asset ownership. If a person already has the actual object, you may wonder why they would want an NFT of it.
The question itself contains the answer: how can one be sure that an asset is genuine?
In 2019, counterfeit products accounted for 3.3% of global commerce. According to a new study, as much as twenty percent of all museum artwork is fake. This is such a problem in the sneaker industry that StockX, a platform for authenticating and reselling sneakers, is worth about $4 billion.
Buying something from a third party increases the uncertainty around its origin and condition. The new kicks you picked up on eBay may seem like Nikes, but unless you got them directly from the brand, you have no idea.
The ability to distinguish genuine from counterfeit assets is, in a word, deteriorating.
What is the solution?
Digital twin NFTs.
Physical objects might be connected to an NFT and kept on an immutable, distributed ledger with digital twin NFTs.
Once again, the NFTs aren’t the actual goods but rather a method of confirming their authenticity. Similar to a receipt or a certificate of authenticity, this record is safe, easily accessible, and contains the item’s whole provenance.
In this scenario, Nike would provide shoes and NFTs to go along with them. Your purchase of a pair of shoes would come with the NFT, or digital twin, of the shoes. Afterward, you may sell both the shoes and the NFT to a third party who will have complete visibility into the product’s provenance.
You can see the high school students of 2030 wearing their brand new sneakers to class. They’d have to flash their digital wallet contents with their Jordans if they wanted people to take them seriously.
Brands like Nike and Louis Vuitton are already jumping on the NFT train to combat more sophisticated counterfeiters, which may happen sooner than 2030.
Luxury goods conglomerates LVMH, Prada, and Cartier, have joined together to create a private blockchain called Aura. Aura is a service that places a large bet on NFTs and has the potential to replace certificates of authenticity as the industry standard.
Nike has developed and patented a blockchain-based verification system dubbed CryptoKicks. According to the patent, users of CryptoKicks will be able to engage in activities typical of NFT games, such as shoe breeding, purchasing, and selling.