Just do it: Nike jumps on Ethereum
In a U.S. patent dated December 10th, Nike outlined detailed plans for a system that would digitize the famous footwear as non-fungible tokens on the Ethereum blockchain.
By creating a cryptographic digital asset on a decentralized blockchain network that is attached to a unique pair of sneakers, Nike hopes to open up new avenues for creative design, enhance the collectibility of classic models, and recoup lost revenue from the damaging trade in counterfeits.
CryptoKicks
According to the patent, when a buyer picks up a new pair of CryptoKicks, a digital tokenized representation of the shoe is generated. This cryptographic asset links the buyer and sneaker together on the blockchain.
Along with all the hallmarks of a non-fungible blockchain-based token like timestamps and transaction data, the token contains a complete set of "genotype and phenotype data", for that specific sneaker. This might include colours, styles, and materials, and will be displayed as a "computer-generated avatar, or a "limited-edition artist rendition" of the shoe.
When a user launches the CryptoKicks app, they can tap into the decentralized network, view the virtual model of the sneaker, and communicate with other users to trade, swap, or engage in selective sneaker breeding in a fashion reminiscent of CryptoKitties.
"[The buyer can] store the digital shoe in a cryptocurrency wallet or other digital blockchain locker, intermingle or "breed" the digital shoe with another digital shoe to create "shoe offspring," and based on rules of acceptable shoe manufacturability, have the newly bred shoe offspring custom made as a new, tangible pair of shoes."
To starry-eyed amateur designers, this artificial genetic engineering could yield endless possibilities for unleashing their creativity on Nike shoes, and network with other fans by conspiring to combine favored models into offspring 'CollaboKick' sneakers that express a unique combination of recessive and dominant genes.
Even real-world events are said to impact the reproductive process, with workouts or visits to Nike stores increasing the likelihood of good gene mutations leading to new features.
In an even more obscure possibility, the patent outlines a situation where the virtual CryptoKick sneaker becomes a 'living' creature — reminiscent of games like Neopets and Pokemon — that the owner must care for through the process of evolving from an infant to an adolescent and an adult, unlocking different physical sneakers at each stage.
Elsewhere, a virtual representation of those same shoes could play a role in other digital realms and even be imported into digital platforms to act as a skin on a video game character.
A booming market
Representing sneakers using Ethereum’s non-fungible ERC-721 tokens is about more than just making unique collectibles and capitalizing on gamification.
Through the blockchain-based system, Nike could potentially glean valuable customer data from the collective activity of users designing shoes and also tap into the booming sneaker resale market to recoup lost revenue.
There is now a booming secondary market, where limited sneakers are exchanged in the same way as classic cars, antique furniture, or pogs. And yet, despite the market being valued at $2 billion earlier this year, sneaker makers like Nike see no money from these sales.
Tokenization may be seen as a way to take back some control of the secondary market, which as footwear research analyst Sam Poser said to Business Insider, can be a valuable source of data when tapped.
"What [the secondary market] is really doing is providing a demand measure for the brand," said Poser, "which helps them understand how many to put out in the market, so they don't have too much out, so they don't end up with markdowns."
Meanwhile, other tokenization projects have found mixed fortunes. Real estate, which was once said to be one of the markets most ripe for disruption, has faced significant setbacks.
The $20 million student housing deal between San Francisco-based blockchain startup Harbor and the real estate arm of Chicago-based trading firm DRW Holdings collapsed in April. And the highly publicized tokenization of a luxury real estate development in New York City was discontinued in November, with a spokesperson citing insufficient "institutional appetite.”
OhNoCrypto
via https://www.ohnocrypto.com
Kieran Smith, Khareem Sudlow
