Before taking this class I was having extensive back and forth text message conversations with one of my closest college friends. Throughout the pandemic we had been sending each other little nuggets of news on exciting technologies or industries to keep our hopes up but also work to open up our collective perspective towards how fast these types of digital worlds changing. He had been raving about how about how much he was excited about NFT’s. At first, I thought that this was a new acronym similar to NSFW and thought he was trying to start talking about something inappropriate. (Full Disclaimer : We did forge a friendship within my freshman year at the Lambda Chi Alpha fraternity, at the University of Miami). Having spent a second googling the above and learning more about the concept, I found that NFT’s were far from a slang term that I could find on Urban Dictionary.
NFT’s stand for Non-fungible tokens. They have as more in common with baseball cards, POGs, paintings, and action figures, (for those of us in class that were born in the year’s of 1982-1988) and contrary to popular belief they are not a new e-gaming pro sports league that you have to feel old or uncool that you aren’t up on it. NFT’s run on a block chain network, a digital ledger that records all transactions of cryptocurrencies like bitcoin ( Source : https://www.cnbc.com/2021/02/25/nfts-why-digital-art-and-sports-collectibles-are-suddenly-so-popular.html) What makes NFT’s so powerful is that they can’t be reproduced or replicated in any way. They have the ability to store value similar to a rare record, an art print, or figurine and are giving artists, makers, and creators a way to prove authenticity, and collect revenue directly something that had been difficult in the traditional world of art collecting and creative distribution rights. One of the more recent NFT successes was CryptoKitties. Launched in December 2017 by digital art-house Dapper Labs, CryptoKitties launched as a way to collect feline looking cards similar to Pokémon but with a twist. Each image was associated with a unique identifier of digits (Token) that was then available for trading on the Ethereum blockchain. Once a Kitty was sold by a particular owner they were granted a title deed granting ownership. Ownership and delivery of the avatar was tracked and supported by the digital ledger and very quickly. CryptoKitties is a game where you collect, breed and even sell virtual cats for real money. Every single cat in the game is entirely unique and also impossible to replicate. Founder cats (the first 100 cats to ever exist on the platform) can go for in upwards of $70,000 – $140,000. The value of these cats originate from the rarity and the age of the cat, and as the examples above showed, the value can vary drastically. (https://academy.ivanontech.com/blog/cryptokitties-explained-what-are-cryptokitties-and-how-do-they-work)
Outside of this, the sports world has taken on a similar endeavor with NBA Top Shot. Also a Dapper Labs initiative, NBA Top Shot is an online-only collection of NBA highlights which can be obtained by buying “packs” or purchased via auction. According to SB Nation “Think of it like buying sports cards, but in video form. You might crack a pack and get a highlight of a Steph Curry three-pointer, which is only being produced 99 times. When those 99 clips are gone nobody else will ever get that same highlight, and Top Shot claims you’ll own that clip forever.” (Source : https://www.sbnation.com/nba/22295195/nba-top-shot-blockchain-video-highlights) What is interesting about the NFT phenomenon is that digital memorabilia has no appraisal process. Ownership and selling is clear and transparent, there is no way to damage or alter the digital good in transit or delivery like physical memorabilia.
More recently, Lebron James’ Top Shot has sold for $200,000 and the market for these types of goods has risen to $1.8 billion (Source : Yahoo Sports Australia). Other sports leagues are looking to get into the action and the UFC has recently launched a similar platform using the same technology that Dapper has provided.
Will this type of application of crypto have legs? History will only tell. But the sports collectible market is something that’s highly established and has a deep and dedicated affinity. I see this being the next iteration of signed memorabilia and a new way for fans to appreciate their favorite teams/players.