Digital artist and Japan-enthusiast Kai’s real name is Noah. He’s a 23-year-old living in New Hampshire, in the United States. After making as much in those three weeks as he’d earn in a year at his music store job, he quit to become a full-time designer.

“It just took off,” Kai said. “It was a new way to express yourself and it’s walking art, that’s what’s so cool about it … when you have a piece of clothing, you can go to a party in it, you can dance in it, you can show off and it’s a status symbol.”

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Kai’s kimonos include exquisite crushed blue velvet pieces with golden dragon trim.

NFTs exploded in popularity earlier this year, as speculators and cryptocurrency enthusiasts flocked to buy the new type of asset, which represents ownership of online-only items such as digital art, trading cards and land in online worlds.

The niche cryptocurrency assets are also capturing the attention of some of the world’s biggest fashion companies keen to associate themselves with a new generation of gamers – although most of their forays so far are for marketing.

“Your avatar represents you,” said Imani McEwan, a Miami-based fashion model and NFT enthusiast. “Basically what you’re wearing is what makes you who you are.”

McEwan reckons he has spent US$15,000 to US$16,000 on 70 NFT wearable items since January, using profit from cryptocurrency investments. His first purchase was a bitcoin-themed jumper, and he recently bought a black beret designed by his friend.

The overall size of the NFT wearables market is difficult to establish. In Decentraland alone, wearable sales volume totalled US$750,000 in the first half of 2021, up from US$267,000 in the same period last year, according to NonFungible.com, a website which tracks the NFT market.

Some proponents say wearables and shopping in virtual shops could be the future of retail.

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For NFT enthusiasts, online fashion does not replace physical purchases.

But Paula Sello and Alissa Aulbekova, co-founders of the digital fashion start-up Auroboros, say it could be an environmentally friendly alternative to fast fashion.

Customers can send Auroboros an image of themselves and have clothing digitally added for £60 (US$83) to £1,000.

Sello argued that the virtual garment concept could limit the waste of consumers buying clothes to wear on social media, citing a 2018 Barclaycard study which found 9 per cent of British shoppers have bought clothes for social media photos, then returned them.

Virtual sneaker company RTFKT sells limited edition NFTs representing sneakers which can be “worn” in some virtual worlds or on social media via a Snapchat filter.

“It really took off when Covid-19 started and loads of people went more online,” said Steven Vasilev, RTFKT’s co-founder and CEO.

The company has posted US$7 million of sales, with limited-edition sneakers selling in auctions for US$10,000 to US$60,000, he said. While most customers are in their 20s and 30s, some are as young as 15.

RTFKT’s NFTs can also be used as a token to get a free physical version of the shoe, but one in 20 customers do not redeem that token.

“I didn’t do the redemption stuff because I couldn’t be bothered,” said Jim McNelis, a Dallas-based NFT buyer who founded NFT company, nft42.

“I try to avoid the physical stuff as much as possible.”