J’Nae Phillips is a Junior Editor at Canvas8. With a background in fashion, she’s experienced in understanding how trends influence culture and play a part in shaping our human behaviour. When not working or studying for her journalism postgrad, she can be found writing for her style focused newsletter and is an avid reader.

“Status seeking is a deep human desire. It will always be within us. The only thing that changes is the way we do it,” says Matt Klein, an award-winning writer who analyses social shifts and the implications of technology usage. 

Interview with Matt Klein conducted by the author

In the past, status may have been determined by how much cattle someone could trade or how much land they owned, but with the pace of technological advancements in the 21st century, markers of status are constantly changing. 

Fast Company

 Where silver spoons and private libraries once flagged one’s belonging to high society, the growth of the virtual economy – which reportedly generates income worth $66.2 billion – has radically shifted the ways people communicate their position among peers. 

Verdict

Approximately 2.5 billion people worldwide participate in the virtual economy, whether that’s through gaming or other digital environments, and as these spaces grow and become more prominent in daily life, the value of digital-only items is rising. 

Futures Platform

 “If you look at the entirety of the NFT market, it has assets available whatever your budget. With the Beeple piece selling for $69 million, breaking records and garnering press, people want a piece of the pie,” says Nell Lloyd-Malcolm, the CEO of 

Interview with Nell Lloyd-Malcolm conducted by the author

 As interest around digital assets grows – 50% of Gen Zers, Yers, and Xers surveyed in 2021 said they were interested in buying a digital skin, avatar, and/or NFT in the following 12 months – and as new business models disrupt virtual economies, there’s vast potential for brands to engage with consumers online. 

The Business of Fashion

Lockdown measures in 2020/21 accelerated the adoption and normalisation of ‘phygital’ lives as many people worked, socialised, and entertained themselves primarily online, leading some to invest more in their digital identities to reflect their real-life codes and values. This, in turn, is prompting people to flex their status in different ways to previous generations, with the rise of NFTs, cryptocurrencies, and the metaverse – which all featured among Collins Dictionary’s 2021 Words of the Year – over this period hinting at the evolving role of tech in social signalling. 

Collins

 Will the virtual economy lead to a new era of status symbols? And can these digital assets expand beyond the digital realms they occupy?

Notions of luxury and status symbols are beginning to manifest in novel ways as people spend more time online. It’s estimated that 57% of the world's population used some form of social media in 2021, and buying a non-fungible token (NFT) to use as an avatar on Twitter or Instagram has become a new way to demonstrate 

DataReportal

 Sales of these virtual assets rose from $1.3 billion in Q2 2021 to $10.7 billion in Q3, hinting at the associated hype around artificially scarce items that recreate a real-world sense of exclusivity in online spaces. 

“Scarcity is inextricably linked to value. The less there is of something, the more sought-after it becomes. It's why we’re seeing a newfound craving for NFTs and luxury houses entering the metaverse,” says Klein, explaining why both brands and consumers are buying into the NFT frenzy. “Today’s excitement is based on exclusivity in a space where it was once hard to deliver.” 

The success of the CryptoPunks collection – which launched in 2017 and has since reached luxury status, with single images selling for millions of dollars – has made it possible for brands such as Bored Ape Yacht Club to thrive. 

The New York Times

 And while the value of NFTs may be subjective – an established factor in the ways the art and fashion sectors operate – the scarcity of these assets has given them prestige worthy of brands like Louis Vuitton, Supreme, or Rolex. 

The New Yorker

As more people create virtual avatars, the value of NFTs looks set to rise

The value ascribed to digital goods is not the only thing that's changing. The notion of influence is also evolving, facilitated by decentralised social spaces. In turn, more people are defining what is inherently valuable to them. “There will be a more democratic approach to existence and room, whether you're catering to a larger or smaller audience,” says Lloyd-Malcolm. 

 Micro social networks have the potential to change the way brands think about digital engagement, with 

 focus on the community aspect of NFTs, for instance, demonstrating how these spaces accommodate niche groups and discussions. 

NFT Evening

 With 52% of Britons saying they want to cut ties with large social platforms, these smaller channels can fill the void, providing a sense of connection built on shared interests, creativity, and equal contribution. 

Warc

According to NFT investor Drew Austin, this shift reflects changing attitudes towards status, with knowledge, connoisseurship, and community increasingly prioritised in social interactions. “We are putting the foundation in place so that people can use their imagination and create stories and content and experiences with their own characters that they own through this because it’s an NFT,” he told The Verge. “The ability to be able to leverage the community, to be able to expand on IP and to create a universe, I think, is a really exciting concept.” 

The Verge

 With Twitter embracing NFT profile pictures and TikTok launching an NFT collection inspired by its most popular creators – Lil Nas X, Bella Poarch, Curtis Roach, and others – it seems big social platforms are wising up to the potential of these digital assets and looking to play a part in smaller community-led networks. 

Cointelegraph

“Social media is a powerful tool to signal to others who we are,” says Lloyd-Malcolm. “A cross-pollination of social platforms will always be apparent – today and when new virtual platforms are created.” 

 A cross-platform digital existence could see people shift towards new forms of social interaction in an attempt to showcase status, with NFTs offering one reliable way to convey clout. But are such niche products diversifying online status metrics or transferring them? “At this time, NFTs are neither diversifying nor transferring – they are doing both. Digital goods open the doors to those who would have originally not participated in a luxury market, but also allow those original buyers to continue in a different space,” says Klein. 

The status attached to a high follower count is waning for some

Representing our authentic virtual selves

A 2021 survey commissioned by Squarespace found that 60% of Gen Zers and 62% of Yers believe that how you present yourself online is more important than how you present yourself in person. 

Squarespace

 With 70% of general consumers in the US (Gen Zers to Xers) considering their digital identity to be ‘important’, virtual economy enthusiasts believe our online personas have the potential to be just as valuable as our offline selves, if not more so. 

While traditional social platforms remain dominant, as the metaverse and virtual reality platforms become more mainstream, they may open up new forms of self-expression whereby brands can help individuals share their true selves. Luxury homeware brand 

 started offering virtual interior design consultancy services to help 

 players decorate their in-game islands, and designer Andrés Reisinger auctioned off virtual furniture NFTs to be used in online worlds. 

Dezeen

 These examples highlight how the new virtual economy has created a market for ways to reinvent oneself through avatars and digital environments.

 is one of a growing number of companies tapping into the notion of a customisable online self. It allows users to create avatars that reflect their unique personalities, regardless of how complex and abstract these avatars appear. For this reason, it's become the chosen avatar generator for celebrities including Cardi B, Justin Bieber, Rihanna, and J Balvin. “We’re going to offer tools so that a 6- to 16-year-old teen in high school can create their own digital wearable and goods collection and then release it in the marketplace and sell to the masses as well,” says CEO Akash Nigam. “The fact that we can allow anybody to sell digital goods and wearables is what gets me really excited.” 

VentureBeat

 By bringing people closer to what they feel is an authentic representation of themselves, brands like Genies are revamping how people perceive identity and status in virtual contexts.

70% of consumers in the US consider their digital identity to be ‘important’

The pandemic caused many IRL events to shift to the digital realm, with everything from fashion shows to funerals held in games such as 

Vogue

The Guardian

 “For the last two decades, [digital assets have] been a huge market in the digital gaming spheres,” says Alissa Aulbekova, the creative director at digital couture brand 

. “The customer is ready. Now we are just bridging the gap between luxury fashion and creativity and accessibility.” 

Vogue Business

 The proliferation of skins in games such as 

 illustrates how brands can help people personalise their experiences online, with virtual stores offering an entry point for those unfamiliar with the broader concept of the virtual economy. 

AdAge

 Snap is lending a hand to businesses who want to launch virtual store experiences, harnessing its expertise with AR, and as people commit more of their time to all things digital, major and niche brands have the opportunity to reach new audiences through three-dimensional e-commerce. 

Digital collectibles in the luxury market

New digital status symbols – such as Bored Ape Yacht Club avatars, Cool Cats cartoons, and 

 – are akin to Ferraris and Cartier watches for digital natives, with 23% of Gen Yers surveyed in March 2021 saying they collected NFTs (more than any other cohort). 

Data Driven Investor | Medium

Morning Consult

 These virtual collectibles are thriving due to their scarcity, giving buyers an immediately apparent way to signal their financial status and cultural cachet. “What few realise about the luxury goods market is that consumers are often paying for the price tag. When we take this concept online, the price of a digital asset is what serves the consumer,” says Klein. “Changing your profile picture on Twitter to your NFT is a signal that you can afford to do so.” 

 is a subgenre of science fiction that romanticises futuristic tech and industrialisation, and 

 is a visual art style that distorts old elements of the web to create a past that never existed. Both aesthetics have gained popularity since the turn of the millennium, enabling people to creatively express themselves in immersive worlds, and for brands that want to tap into evolving digital realities, there's an opportunity to build a new aesthetic history. 

allowing players to purchase virtual outfits. The brand has also captured the attention of this community with a 

 show, pushing the boundaries of digital innovation. As more people flock to social-based virtual worlds like 

, the virtual economy will allow brands to collaborate with digital natives in new and experimental ways.

Matt Klein is a cultural theorist, cyberpsychologist, and marketing strategist, analysing social shifts and the psychosocial implications of our technology. Working alongside brands, TV producers, non-profits, and government agencies, Klein is a trusted source in identifying cultural change and developing future-proofed business strategies. As an award-winning writer and frequent commenter, his observations have been featured in 

Nell Lloyd-Malcolm was a VFX producer who worked across multiple blockbuster films and TV productions including 

Ready Player One, Star Wars, Mission Impossible, and The Crown

. She is now the CEO of Xydrobe, a company that works with brands in luxury fashion and goods to provide customised end-to-end solutions for entry into virtual products.

Global

Technology

Communications

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