Blockchain Technology and How It’s Revolutionizing the Fashion Industry
When blockchain technology started becoming mainstream, people only used it to trade and purchase cryptocurrency. People would buy crypto with credit cards or debit cards through the blockchain. Crypto exchanges would allow them to convert cryptocurrency (fiat) to USD or other local currencies. That was happening over the blockchain.
When you buy cryptocurrency through an exchange, you register the transaction on the blockchain. The blockchain is a ledger that holds all transactional data. For a while, that is all people knew about it.
However, the blockchain’s role has somewhat evolved recently, and it is now catering to other sectors, including the fashion industry.
Fashion Brands Enter the Blockchain
The biggest names in the fashion industry have been wanting to use blockchain technology for a while. So far, they have made quite an impression in this regard.
Fashion giant Hugo Boss has long wanted to explore blockchain technology and make the best use of it. They are looking into ways they can manage their supply chain and track particular goods. That will allow them to delve into the details of their goods’ ownership and transfer.
LVMH is working with tech giants Microsoft and ConsenSys on a blockchain-based platform. The platform will help ensure the authenticity of their luxury products. It will also help them keep track of the life cycles and proofs of origin and ensure intellectual property protection.
Many other renowned fashion and luxury brands are using the blockchain to prevent counterfeit products from entering the market. After all, scarcity is what drives profits for many of these brands. So, it is necessary for them to prevent fake or unauthorized products from entering the market.
How Blockchain Technology is Impacting the Fashion Industry
The impact of blockchain technology on the fashion industry is far-reaching, but how exactly is it so? Let’s find out.
Buying With Crypto
Do you remember the time you got yourself a debit or credit card? Didn’t you stop using physical currency to some extent after that? Many go as far as going cashless entirely in such situations.
When people find an alternative and sustainable currency or payment method, they will use it. That’s what’s happening with crypto when it comes to buying fashion products.
People purchase cryptocurrency from a cryptocurrency exchange. They buy crypto with a credit card, debit card, wire transfer, or through any other standardized bank deposit.
Since it’s a legal form of currency in many places, businesses will accept it as a form of payment. They will convert cryptocurrency (fiat) into USD or whatever local currency they use and then use it accordingly.
Having a cryptocurrency wallet and finding places you can use it is a blessing these days. The fashion industry is banking on this idea and making good use of it.
Entering the Metaverse
Brands like Nike, Adidas, Gucci, Prada, etc., have all joined the metaverse. More fashion brands will follow. Selling NFTs is profitable these days, and these fashion and luxury brands plan on doing that.
Once again, leaning on scarcity, brands are taking this opportunity to create sellable virtual fashion products. Since NFTs exist on a blockchain, it will help prevent piracy and duplication of their products.
The idea of having virtual fashion products may seem a bit too futuristic. However, a few years later, it could be the biggest revolution the fashion industry has ever seen.
We have touched on this earlier, but now let’s elaborate.
Using a blockchain-based supply chain lets fashion product manufacturers prevent counterfeiting. Since all authorized and authentic products are on the blockchain, you can track and identify counterfeit ones.
Such a supply chain also lets customers receive information regarding the product, like its origin and how it reached their doorstep. That way, they can ensure that the manufacturers made the product ethically.
Ensuring Sustainable Production Practices
A supply chain on the blockchain will help manufacturers ensure that their products are following sustainable manufacturing processes. It’s the same as ensuring ethical production practices.
Here, manufacturers can track the product development life cycle to see whether sustainable practices are being used. Customers, too, can keep brands in check if they can see this blockchain-based supply chain or access reports regarding production specifications.
The blockchain narrows the gap between fashion brands and consumers, facilitating sustainable and ethical development practices. The technology is also opening new investment areas for these brands. Thus, it is safe to say that blockchain technology is indeed revolutionizing the fashion industry.