Clips of NBA players doing slam-dunks in the digital ether are generating millions. This newly emerging market is closely entwined with Bitcoin and other cryptocurrencies.
What’s odd about this entire process is that the same content is available for anyone who wants it. The “ownership” is transferred to a user and certified by a unique digital code. This code is called a nonfungible token.
Are you still confused? That’s okay. Welcome to the digital world of NFTs.
The World of NFTs
NFTs have generated a massive slew of money in the last few months. The headlines have caught the attention of artists and investors alike.
Digital artist Mike Winkelman, better known as Beeple, made $69 million for only one of his collages. Jack Dorsey, the founder of Twitter, sold his first tweet for $2.9 million. What a time to live in!
The world of crypto is abuzz with talk of digital collectibles. The unique tokens can represent anything! There’s art, music, tweets, and sports memorabilia.
What are NFTs?
NFTs are non-fungible tokens that run on a blockchain network. You can’t exchange one token for another. Like other cryptocurrencies, a digital ledger keeps track of all the transactions.
There is one key difference, though. Each NFT is unique and can’t be recreated. The tokens accrue value separately. Part of the reason its driving value is its scarcity.
These tokens are stored in digital wallets as collectibles. However, NFTs go beyond arts and sports collectibles. Enthusiasts have found ways to incorporate virtual real estate and games.
Musicians also claim these digital assets are better copies of MP3 files. Aspiring artists struggle to make money in this digital age. NFTs allow them to get an additional source of revenue. But, more importantly, they finally own what they create.
The total number of NFT transactions will continue to rise. There is a new generation of traders in the market. People want to become digitally native and own purely virtual assets in this digital nation.
How Do NFTs Work?
NFTs are similar to cryptocurrencies. However, they operate on a shared digital ledger or blockchain. It’s a transparent and crowd-verified system that makes tracking seamless, fast, and accessible.
High-end digital art is all the rage. However, NFTs back up so much more. Mundane collectibles, such as short clips of sports stars, are making a rise.
These are a hit or miss, though. Nonetheless, you’ll even find low-resolution digital images like CryptoPunks selling well.
However, the questions remain unanswered. Are NFTs just the latest digital craze? Will it follow a similar trajectory as GameStop or Dogecoin? Or, is this a new era for virtual assets?
The Era of Change
People have been paying thousands for these NFTs. For example, a Canadian investor paid $20,000 for these computer-generated avatars known as CryptoPunks. It’s not a new phenomenon by any means. However, it witnessed a boom recently, generating over $45.2 million, inspiring the crypto art movement.
CryptoKitties generated around $430,000 just last week. Dapper Labs, the creators of digital cats, clogged up the digital network currency. NBA Top Shot attracted $147.8 million in sales within a week. This service allows enthusiasts to buy and sell highlights of top basketball players.
This movement is no joke. It’s a revolution surrounding a few select websites like Dapper Labs. New York-based Candy Digital handles NFTs for Major League Baseball. Rarible, Sorare, and OpenSea have forked over thousands of dollars apiece.
There’s a reason why Sports NFTs are selling like crazy. Fans like exclusivity. They want tokens that can be tied to their teams. An autographed jersey or bat can be hard to attain. However, a digital extension of your favorite player or team? Easy!
NFT creators aim to integrate rare trading cards into the system as well. This change will make the items even more popular. Now, people will get physical memorabilia with their NFTs. There’s a sense of authenticity to it.
The real question is, are sports NFTs merely a trend? Or, are they a winning investment?
Selling Sports Cards: The Start of Something New
Gone are the days when a sports fanatic walked into a store to buy a Topps trading card. Now it’s the time for one-of-a-kind NFT collectibles. Each video, photograph, and snippet have a unique ownership code.
2021 was only the tipoff. The market forecast says it will grow to $75 billion by 2025. Did you know? An NBA clip featuring LeBron James sold for a record $208,000!
However, sales can be volatile. For example, NBA Top Shot and CryptoPunks trades have seen rises and fall within a day. These unpredictable prices have garnered the fears of speculative crypto traders. So, will there be another bull and bear market? It’s hard to say.
Firms are hopeful, though. Some believe NFTs are here to stay. The resurgence for sports collectibles, especially sports cards, among the youth helps. Just take a look at the billions of dollars spent on Fortnite skins. The value they create in players is indescribable.
Digital assets have a lot to offer in terms of consumer experience. People live for the experience, not the tangibility of the object. There’s a sense of excitement with the rarity of products and the purpose of ownership with them.
An NFT replicates that and more. It may have started with a game highlight video. But, in the coming days, there will be more. For example, you can anticipate VR scenes or unique team jerseys.
What NFT designers must focus on is how to drive value. As long as you can add benefits to these digital forms, NFTs will survive. Moreover, the competition is increasing.
Are the rising number of competitors intimidating the existing players? Of course. However, will that curb their enthusiasm? Not! Since sports have forayed into the digital ecosystem, it will only become bigger and better.
Scott Trick has collected sports cards since the early 80’s and because of his love for collecting he started the website https://sportscardsauthority.com. His favorite players are Robin Yount and Hank Aaron, but he cherishes all sports and all cards like they are art.