Nike Patents Blockchain-Based Sneakers

One of the leading sports apparel companies, Nike, secured a patent for an automated generation system of cryptographic digital assets, tied to a new pair of sneakers. The "tokenized" sneakers will be supplied with a special ERC-721 token system, containing unique sneaker ID, as well as attributes such as color, shoe size, and other distinctive treats.

Nike's goal, according to the patent paper, is to eliminate the widespread counterfeit footwear, which "has plagued the footwear and apparel industry by providing low-quality goods with the intent to deceive buyers into believing that they are purchasing the true manufacturer's authentic goods."

Furthermore, Nike digitalizes the way people interact and customize their sneakers, providing users with a "secure medium for end-to-end traceability."

In order to create a fully-digitalized digital locker, Nike would issue a Unique Product Identifier (UPID) and a non-fungible ERC-721 token to correctly identify a pair of shoes, each time someone buys them.

The tokens would be stored on a blockchain server, which could be easily accessed via a smartphone app. The "Digital locker" app is a form of a crypto wallet where users can store their digital representations of the shoes.

Nike hopes the new system would create a whole new ecosystem around sneakers, as the users receive a digital "copy" of their shoes, with their own unique design.

"When someone decides to sell their CryptoKicks, the ownership of digital assets, such as the UPID and the token can be easily transferred to the new owner via the Digital Locker smartphone application," the patent reads.

Nike filed the patent back in April, but the US Patent Office granted the shoe giant the sole right to utilize that system on December 10th 2019.

The patent comes just as China, one of Nike's best shoe markets, is undergoing a so-called "blockchain transformation." Chinese are renowned for their demand of limited-edition sneakers and apparel. It's not a surprise that Chinese "brand hunters" are developing a secondary market for second-hand clothes and shoes. Brands like Adidas, Levi`s, Puma, and Everlast also received a secondary market push, further increasing the value of the brand names. 

With the 22% jump in revenue in September, Nike is aiming at those who value the uniqueness of their shoes.