Blockchain: Why It Matters
A few months ago, I wrote a post about the ineffable NFT. Since then, the number one question people seem to ask me is how NFTs relate to home décor. In short: Why should I care?
It’s a fair question for an industry that focuses on our physical environments. Afterall, NFTs and the blockchain they depend on live in a mysterious realm of ones and zeros. I could make my response simple. Say the word “Metaverse,” drop mic, then leave. But I know that doing so will likely lead to more confusion than insight.
So fear not. This is not a post about the Metaverse. Rather, this is a post about blockchain, why it’s a game-changer, and why you need to pay attention. This is a post about the ineffable NFT, digital twins, and distributed ledgers. Most importantly, this is a post about why you should care, even if you’re in the business of making physical stuff.
There’ll Be an App For That
First, let me dispel the misperception that NFTs have no significance in the physical world. While it may seem strange why someone would want to own a jpeg that also exists on multiple computers and networks across the world, to understand the greater significance of NFTs and blockchain, you must first broaden your point of view. Instead of thinking of an NFT as a single, ethereal thing, think of it as a piece of a larger system.
“Instead of thinking of an NFT as a single, ethereal thing, think of it as a piece of a larger system. ”
Most of us are already familiar with NFC (near-field communication) and radio frequency identification (RFID) microchips. If you have a pet, you might have had one implanted into its scruff. But these technologies have a multitude of uses that go beyond protecting Fido from getting lost. Many companies regularly use RFID chips to track shipments and inventory. Today, some, including Prada, are experimenting with using the tags in tandem with blockchain technology, thereby uniting the physical with the virtual. Doing so gives each individual physical object a unique digital identity.
The real-world implications for this go far beyond jpeg ownership. Imagine as a consumer scanning an object and seeing in-depth information about the piece’s history—where it was made, how much carbon was released in its production, if workers were treated ethically, etc. You might even see information on the specific craftspeople who produced it or photos of it being made. If the object is second-hand, you could view a complete provenance of ownership and a record of its authenticity. Want to know if your t-shirt has cotton from Xinjiang? Or if that Hermès scarf is legit? Yep. There’ll be an app that.
Now let’s take this a step further. Imagine you’re a company struggling to engage with your customers as brand loyalty declines. By linking RFID with blockchain, you now have a new way to connect, offer transparency, and better the buying experience. Using this technology opens up a gateway to engage with your customers, offer suggestions for future purchases, provide a direct line to direct customer service, and even offer access to special events and sales. Luxury brands could track their products through the secondary market, creating greater trust and protection from counterfeits. If you’re worried about privacy issues, remember that it is the object being tracked, not the individual consumer. Personal data would remain anonymous.
Meet Your Digital Twin
If you need more convincing, let me introduce you to the digital twin, a concept that centers on the creation of an exact virtual representation of a real physical object or system. Sensors connected to the physical twin collect data that is transmitted to the digital twin in real-time. Doing so not only gives a clear picture of the physical twin’s status but also allows engineers to prototype and predict future performance. Used by NASA engineers, urban planners, and other designers of complex systems, digital twins offer valuable insight into potential problems before they become critical.
Louis Vuitton’s 2021 Objet Nomades collection blends the worlds of fashion, travel, and design.
The fashion world, however, seems to be eyeing a new use for these siblings. By pairing a physical object (say, a dress) with an NFT version provides new possibilities. The purchase becomes a twofer—the buyer receives both the physical dress as well as the digital replica. This sort of NFT fashion is already used by gamers to dress personal avatars, but the addition of the twin design opens the platform up to non-gaming consumers. Instead of dressing a virtual character, consumers can “wear” the clothing when posting to social media. Companies like Neuno are partnering with social platforms to allow the NFT to be used as a personal augmented reality filter. Snapchat with your personalized Louis Vuitton filter? Yep, it’s happening.
Why You Should Care
Back to the question at hand: what does all this mean to the industry of home décor? Anyone who’s followed trends understands that the line between fashion and décor is fine. Though the industries are separate, they often share the same customers, the same values, and the same aesthetics. What happens in fashion, often eventually finds its way to home décor.
Today it is not uncommon to see fashion houses expanding into home décor. Louis Vuitton started their celebrated Objets Nomades collection in 2012, uniting a luxury trifecta of travel, fashion, and design. The past few years have seen fashion stars Miranda Kerr (2018) and Christian Siriano (2021) launch their own lines of furniture and décor. As this trend continues, we can expect to see the interchange between fashion and décor happen with greater speed. What used to take years to trickle down, will soon happen much faster.
This exchange is bound to move beyond just aesthetics and into how these brands conduct business. Though fashion trends come and go, luxury brands are betting big on blockchain, proving they are in it for the long haul. Just last April, luxury heavyweights LVMH, Prada, and Richemont (owners for Cartier, Mont Blanc, Van Cleef & Arpels, among others) combined forces to create the Aura Blockchain Consortium. “This is not another tech venture,” their website claims. “This is about new possibilities.” What’s more, major money is being invested to move crypto from niche tech to the next must-have tool. This year along, VCs have already invested an unprecedented $17 billion in crypto and over $90 million in NFT marketplaces.
The writing is on the wall. Blockchain is here to stay. The question is, how will you be a part of your company’s future?
