It’s been a rite of passage among young children for decades to collect trading cards of their favorite athletes. You’d take your doubles to school with you and trade them with friends on the playground during recess. Finishing the set was a huge status symbol among the grade-school elite.
Children spent hours admiring their cardboard heroes and devouring all of the stats and information included on the back each player’s card. It was a sure bet that the stick of gum, included as a bonus inside each pack of cards, would be stale and brittle when you tried to chew it.
Collecting has changed dramatically since those seemingly innocent days. Today, the buying and selling of trading cards is big business, with companies in the business of grading the quality of the cards between 1-10 to increase their value on the open market, much in the same way that jewellery and rare coins are appraised to determine their worth.
Another dramatic change is taking place in the world of sports collectibles, one that combines old-school collecting with new age technology and yes, even the blockchain. NBA Top Shot is threatening to be a game changer in the way people collect items of their sporting heroes.
What Is NBA Top Shot?
It’s being called the future of the trading card market. NBA Top Shots are virtual cards that feature individual highlights of NBA players. NBA Top Shot operates in a blockchain-based platform, allowing fans to buy, sell and trade numbered versions of specific, officially-licensed NBA video highlights.
The joint venture was launched in July of 2019, with the National Basketball Association, the NBA Players Association and Dapper Labs all combining to create NBA Top Shot. All three entities get a cut of the money from each sale.
According to Dapper Labs Chief Executive Officer Roham Gharegozlou, it’s a “revolutionary new experience in which jaw-dropping plays and unforgettable highlights become collectibles that you can own forever.”
Here’s how it works: first of all the NBA cuts the highlights and ships the videos to Dapper Labs. The staff at Dapper Labs then makes the decision as to how many of each highlight they intend to sell, numbering them much like trading cards in a traditional set. Next, each highlight is placed into a digital pack, again similar to how regular trading cards are sold.
The packs are then put up for sale on the official NBA Top Shot website, with prices ranging from $9-$230. The prices are dependent on both the quality of the highlight and the level of the star who appears in the highlight. In other words, you’ll play more for a highlight featuring LeBron James or Steph Curry.
Once someone purchases one of the digital packs, the highlights contained in that pack are moved into that person’s encrypted, secure highlight wallet as non-fungible tokens. There, they can be showcased for others and re-sold through the NBA Top Shot Marketplace.
How Much Will They Be Worth?
The early returns indicate that this new format for collecting could eventually be worth billions of dollars. NBA Top Shot is still in its beta launch, yet already, all the packs on offer are sold out. They’ve accumulated more than $200 million in sales to date.
“We knew this was rocket fuel,” Gharegozlou told the Wall Street Journal. “The thing that surprised me is how quickly mainstream basketball influencers adopted it.”
According to the Wall Street Journal, Michael Levy, a 31-year-old financial advisor, spent $175,000 on some of the NBA Top Shot products. Already, the value of his digital cards is estimated at $20 million.
“This takes the traditional collectible into a modern, global era,” Gharegozlou told The Action Network. “All markets are immediate and international. No longer do you have to wait for a card to be graded, or delivered, or fear of forgeries.”
As the NBA Top Shot beta launch continues, more packs of digital cards will be released.
“The trading card business is worth $5-$6 billion annually,” Gharegozlou said. “I don’t see why we can’t get to a place where this business is grossing $1 billion alone.”