These virtual rainbow-colored sneakers were released digitally as NFTs or nonfungible tokens. The latest internet-based collecting craze, NFTs are digital art or collectibles that are authenticated or “minted” using blockchain technology and then purchased using cryptocurrencies such as Ethereum. A digital ledger, which anyone can access, tracks who owns a given NFT, and ensures that the NFT can’t be duplicated or tampered with. Owning an NFT does not mean you own the copyright to a given asset, but it does grant you bragging rights. And NFT sales can be staggering: Last week, net artist Mike Winkelmann, who goes by Beeple, sold a single digital collage through Christie’s for a record breaking $69.3 million to the Singaporean cryto fund Metapurse.

With all the money sloshing around the NFT market, it would seem like a natural playground for luxury industry players like Gucci, Saint Laurent or Prada, which have long sold costly, attention-grabbing goods. So far though, the roughly year-old company known as Rtfkt (an intentional misspelling of the word “artifact”) is the prominent player marketing NFT sneakers and now clothes. Its success could offer fashion companies a roadmap should they choose to wade into NFTs.

“Sneakers were the basic vehicle to start with,” because they were an existing asset class explained Benoit Pagotto, one of Rtfkt’s three founders. (In a very internet-age company structure, Mr. Pagotto is based in Paris, but his partners Chris Le and Steven Vasilev are located in Salt Lake City and Los Angeles, respectively.) Mr. Pagotto, who previously worked in the esports industry, noted that, in 2021, even teenagers know you can buy a new, hyped up sneaker such as an Adidas Yeezy Boost one day and sell it for serious profit the next.

That flippability of a sneaker applies even in the digital realm. Just a few weeks after their launch, some Fewocious “shoes” are trading for around double their launch price. And unlike the traditional auction market, each time the NFT is resold, Rtfkt receives a cut. This is a common practice in the market and makes NFTs even more enticing because on paper, creators can make money in perpetuity.

The company isn’t solely digital. Rtfkt has hired two former employees of the venerated shoemaker Clarks to fabricate real-world samples of its digital sneaker designs and will issue tangible versions produced by factories to all NFT-holders. “We think that emotional bond to physical objects is still important and can increase the attachment” to the design, said Mr. Pagotto. The tangible Fewocious sneakers will ship starting in April, but Mr. Pagotto said that for the company’s customers, these real shoes represent a less interesting side show to the digital release. In the weeks since the virtual shoes’ release, he has watched NFT holders giddily post about the designs on social media, all without ever touching a physical copy.

Rtfkt’s prime audience comprises two, often overlapping, groups: digital devotees who habituate social media; and crypto-currency zealots who have reaped online-based fortunes. Arthur Meucci, 30, a photographer and early NFT collector, purchased one version of the Rtfkt Fewocious shoes. He looks forward to receiving the physical pair, if only so he can make a YouTube video of him unboxing the blisteringly rare shoes. After that though he plans to offload the shoes. “I don’t see myself walking around with a pair of shoes that cost that much,” he said. To him, the shoes and the NFT are more of a speculative asset than a wearable item.

A thirst for digital flexing may hold the key to where “wearable” NFTs are heading. Clothing has long played a role within digital experiences. Popular contemporary games like “Fortnite” and “Animal Crossing” allow players to go all in on outfitting their characters. Fashion brands have even entered the virtual fashion ecosystem: Earlier this year Gucci introduced its North Face collaboration inside the “Pokèmon Go” game. Yet, those clothes are limited to that specific game. As Rustin Sotoodeh, 25, the CEO of tech accessories company Higround and an NFT true believer explained, this is equivalent to buying a pair of Nikes but only being able to wear them in the store.

He believes that in the future he’ll be able to “own” a clothing item digitally—outside the parameters of one single game—giving one the capacity to strut around in any virtual space. His “pipe dream” he said, was to have both a real-world and an NFT version of his favorite Stone Island jacket. He could walk to the corner store in it, or digitally he could play “Halo” in it.

There are indications that companies are working towards this one-to-one relationship between one’s household closet and one’s digital closet. In 2019, Nike patented “CryptoKicks,’’ a system where customers receive a virtual version of a shoe as they buy it to be stored in the “digital locker.” This technology has yet to be rolled out and a representative for Nike did not respond to a request for comment regarding the patent. Even NFT advocates believe that Mr. Sotoodeh’s dream open landscape is far off. Gaming “is a very competitive industry,” said Mr. Pagotto of Rtfkt, and it would take a high level of cooperation for video game publishers to use the same NFT-enabling technology.

For now, NFTs are largely static objects—comparable to paintings hanging inside one’s home. Even in that framework, some NFT aficionados see potential for the fashion world. Jeff Carvalho, the co-founder of Highsnobiety, a clothing and culture website, theorized that a fashion label like, say, Tom Ford, could mint a memorable runway moment and offer it for sale. This is comparable to NBA’s Top Shot , a highly lucrative marketplace where fans spend five- or even six-figures to own NFT clips of highlights such as a LeBron James dunk. Mr. Carvalho also imagined fashion houses selling NFTs of their most iconic designs. If you’re already a hoarder of Margiela’s signature cloven Tabi boots or Comme des Garçons Play’s cutesy hearted logoed tees, owning an uber-rare NFT-only version of these designs could be the cherry on top.

Mr. Pagotto offers a reality check: Unlike basketball, fashion is “not that much of a fan business.” There aren’t millions of people streaming runway shows and there’s far fewer Tabi boot collectors than LeBron fans. These facts limit the audience—and potential big-money returns—of luxury NFTs. When contacted about possible future applications of blockchain technology, several fashion brands including Gucci, Burberry and Louis Vuitton did not comment or did not respond.

The next immediate step for fashion-focused NFTs may be something that Mr. Sotoodeh created purely for fun. A few weeks ago he minted an offhand cell phone “fit pic,”—a head-to-toe photo of what he was wearing—which he claims is the first NFT fit pic ever. It’s not a particularly great photo—his head’s cut off and his arm is disappearing out of frame. But it’s the sort of inane piece of ephemera that can thrive in this madcap NFT world. After all, Twitter founder Jack Dorsey is auctioning off an NFT of his first ever Tweet that is up to $2.5 million on Valuables, an NFT marketplace. So far, no one has bought Mr. Sotoodeh’s NFT fit pic, but with only a few thousand Instagram followers, Mr. Sotoodeh isn’t quite a blockbuster fashion influencer. If someone with several million followers mints the right fit pic—ludicrous as it sounds—the crypto sales might start flying.