Never get between a sneakerhead and his grail—even though plenty of greedy con artists are certainly trying to.
Sneaker culture has never been hotter, and the best footwear brands are happy to capitalize on this unquenchable demand for the next big sneaker. With each new limited-edition drop, fans flock to online resale marketplaces like Grailed, StockX, eBay, Stadium Goods, Amazon and Urban Necessities in hopes of scoring an ultra-exclusive release—even if it means paying exorbitant prices.
In fact, the buzz around sneaker resale has led some to speculate that such small-batch footwear could be the “next great alternative asset.”
However, where there’s hype, there’s also the risk of being taken for a ride. Fraud, it turns out, is a top concern for sneaker buyers and they’re especially wary of the trust required for authentic online transactions, where 81 percent of resale transactions take place, according to a survey of 1,000 sneakerheads conducted by vIRL, a company that helps sellers create digital counterparts of the real-life, mostly sneaker and streetwear products, they own in order to trade and sell with confidence. (The company name is a mashup of “virtual” and “IRL,” i.e., “in real life”).
In fact, independent sellers hawking their wares on eBay and Amazon are not to be trusted, according to 37 percent of vIRL’s survey respondents who believe these resellers are dangling fake product. This is particularly troubling because eBay is a top destination for people looking to flip their shoes (27 percent), and Amazon (15 percent) is another place consumers go to find the latest shoe. However, a larger percentage of resellers leverage social media (33 percent) to turn a quick profit on their kicks, the survey found.
Given that roughly 40 percent of individual sneaker resellers purchase a pair of shoes at least once each week, the economics of ushering transparency into the secondhand world are compelling. Most of those in the market for resale kicks are concerned about exchanging their money for a fake (69 percent) while another 31 percent claim they’d been scammed on their quest for a hot pair of sneakers—either purchasing what turned out to be counterfeit (71 percent) or never receiving anything at all (41 percent).
Just as consumers of high-end jewelry want to see a certificate of authenticity accompanying their pricey diamond, so too do stakeholders in sneaker resale need some sort of proof that what they’re buying isn’t some grossly overpriced imitation. Sixty-four percent of vIRL’s cohort believe this sort of certificate issued by a reliable third party is important to the resale process, while 82 percent said they’d be much more willing to buy sneakers online if their purchase bore a guarantee of authenticity.
Here’s where blockchain comes in. People who’ve made “vIRL” versions of their goods can trade or sell them on the blockchain from the Worldwide Asset Exchange (WAX). Customers browsing vIRL sneakers for sale or trade on WAX can see each item’s transaction history—significant considering how frequently a hot pair of sneakers could change hands. Beyond that, WAX displays high-res, 360-degree views each product, which have been inspected using black light (the technology infamously used to spotlight shoddy housekeeping in hotel rooms).
Despite incorporating this technology into its authentication processes, vIRL recently worked with internet sensation Yeezy Busta to further strengthen the verification of inbound sneakers. As his name implies, Yeezy Busta rose to viral fame because of his ability to discern authentic Adidas Yeezy Boosts from knockoffs. Though he has more than 760,000 Instagram followers, Yeezy Busta has refused to give out his real name, only revealing that he’s a medical student in Los Angeles.
He seems to be on board with the vIRL plus blockchain concept, however. “Packing and shipping deadlines make reselling impossible on the go,” Yeezy Busta said in a statement. “vIRL holds it, packs it and ships it—which means you can sell from anywhere. It’s just better.”
vIRL isn’t the only startup to realize blockchain’s potential for the sneaker resale world. In March China’s Unique Fashion Object sneaker resale platform said it would immediately begin using blockchain to authenticate the footwear flowing through its network.