Are Digital Passports a Path to Web3 Mass Adoption or Consumer Roadblock?

December 14, 2023

Words matter — and in web3, they can get pretty confusing when new technologies are adopted so regularly. 

In October, we published a primer on NFT digital twins, which help connect a physical product with a digital asset, which is often its virtual representation. Today, we’ll be digging into another piece of web3-powered tech focused on blurring the lines between digital and physical assets — digital passports — a new term and tool being adopted by one of the world’s biggest luxury brands. These new digital passports carry with them some striking similarities to digital twins, though with some interesting (and potentially revealing) differences. 

Digital Twins vs. Digital Passports 

Digital twins are virtual copies of physical assets that can share data with their physical counterpart, linking the two across different environments. They are fantastic for verifying the authenticity of physical goods, increasing the lifespan of a product, offering consumers dynamic opportunities for using their possessions in virtual environments (i.e., the metaverse), or unlocking a physical counterpart. Digital twins can sometimes be accessed from scanning a NFC-chipped QR code (think contactless payments take Apple Pay) on a physical good, which can be linked to metadata of a digital asset, often in the form of an NFT. Other times, brands might start by dropping an NFT or other token that must be claimed or held to redeem its physical counterpart, without the claiming process starting from purchasing a physical item. RTFKT and its recent Nike Dunk Genesis drop is such an example  — NFTs had to be be bought and held as a digital twin before the physical shoe could be claimed  

Digital product passports (or DPPs) are something slightly different (and no, they aren't a digitized version of your national passport or vaccine passport). They are user-owned digital assets offered by a brand and stored in an application, including authenticating product data that’s stored on a blockchain. Users can connect a physical product to a digital passport by scanning an NFC chip that’s embedded in a product. 

Digital Passports in Action: Brand Activations

Digital passports, something being used by luxury brands like Tod's and Mugler — and according to an article in Business of Fashion, across millions of luxury products — utilize NFC technology to provide consumer authenticity and background off their items alongside the potential to unlock experiences and digital assets (like digital twins).

French luxury brand Mugler recently announced that two handbags — the Spiral Curve 01 and 02 — would begin to include digital passports embedded on a QR code tag inside the bag. Buyers can scan the code to access a unique online profile that includes "blockchain-backed" details on the bag's materials, access to claiming its digital twin (according to articles in Forbes, Business of Fashion, and Vogue), and exclusive perks.  

For a bag that retails at $2,450, a digital product passport can provide consumers an added level of confidence in the authenticity of their bag, which is validated, tracked, and can also be transferred if the product is resold (something the company is referring to as "new digital touchpoints"). For Tod's', its Di bag luxury line will link to digital product passports embedded via an NFC chip on the brand's logo, with authentication data stored on a "traceability token." 

Neither brands’ website pages feature explicit language on the ability to access the bags’ digital twins — and Tod’s’ focuses mainly on how the passports contain information on the bags materials, manufacturing, plus the opportunity for exclusive access, customer support, and even triggering a warranty.

What brands should keep top of mind

The recent Roblox report spoke to the value of empowering digital identity in younger consumers, and there's no shortage of luxury brands aimed at older audiences in the metaverse, mixing physical products and digital experiences. However, digital passports, which may become an evolution of the tags and barcodes typically within products, might not be as successful in bridging consumers and their physical products into digitally-native environments. This prediction might boil down to optics, a slightly stuffy and confusing name, and the influence of regulation. 

Still, supporting sustainability and protecting against counterfeiting is a net positive for brands — both ethically and technologically. A new digital passport might still appeal to consumers interested in verifying their expensive products and gaining potential access to rewards and perks outside of initial NFT drops or digital twin claims — though some might not understand the nuances behind how these processes work. 

Time will tell if consumers will latch on to the act of scanning and sharing their digital product passports or if they'll be as attracted to how digital passports improve sustainability or adhering to regulations (doubtful) as much as they might like verifying or flexing authenticity and unlocking experiences (this can happen without digital product passports). 

As we said above, words matter, and the new use of digital product passports as a gateway to consumer adoption of blockchain technology — including digital twins — might not be the best fit for brands looking to retain consumers, gain coveted data, and offer dynamic opportunities around their products.


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From paper to plastic 💳

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