CyptoKitties, NBA Top Shot, and the changing world of collectibles
When I was around 7 or 8, my uncle was working at a hotel frequented by tourists from all around the world who would often leave tips in their local currency. He would always put aside the most interesting bills and coins to give to me because he knew I liked collecting them. Every time he gave me some money from a different country, I would scrutinize it to see what writing it had, and I would try to learn more about the country. The ones that fascinated me the most were those with really high numbers on them - I couldn’t entirely fathom why a billion dollars in Zimbabwe was not a very large sum of money.
I never went too far with collecting currencies, but it eventually led me to study economics, which answered my questions about the Zimbabwean dollar. I remembered all of this when I first came across the NBA’s newest product, NBA Top Shot. In the NBA’s words, it’s “the future of the trading card market.” I don’t disagree, but I think there’s a little more to it. It is primarily a marketplace for video highlights of key moments in the NBA, but with the twist of each highlight having unique attributes that limit its availability and control its rarity and value. This is all thanks to Top Shot’s existence on the Flow blockchain, which Dapper Labs manages.
I’d heard of Dapper Labs multiple times before the recent rage over NFTs through the Vancouver tech-sphere. Still, CryptoKitties, their flagship game, was limited to a relatively niche corner of the tech space. In CryptoKitties, players can purchase, collect, breed, and sell virtual cats. They’re not represented physically, and their value is not backed by any ‘real’ good like gold or oil. The game is one of the earliest recreational applications of the blockchain and non-fungible tokens, which are unique and non-interchangeable blocks of data within a blockchain — in this case, Ethereum. In many ways, it’s similar to other fiat currencies, but even more so to everyday collectibles such as baseball cards or stamps. This is why the NBA and other organizations are heavily invested in adopting the change early on.
NFTs lend themselves to exciting applications within the collectibles space, such as TopShot and CryptoKitties, but they can also be used for verifying event tickets or limited-edition items and ensuring reselling revenue returns to the organizers. Today, a concert ticket may initially sell for $150 and then be resold the day of the event for $500 without any of the extra $350 making their way to the performer. If the ticket is an NFT, it’s easier to trace it and monitor reselling transactions. They also globalize the collectibles world even beyond existing marketplaces like eBay. NFT marketplaces erase traditional barriers to entry such as delays in the transfer of ownership since there’s no need for physical shipping and delays, and the risk of buyers receiving a fake collectible that has no resale value.
Outside of gaming and collectibles, real estate saw a few uses of NFTs to manage the rights to digital and real properties which resembles the traditional applications of the broader blockchain technology around contract management and ledger-driven security.
NFTs are bound to be applied in more ways as their mainstream popularity grows in the future. Until then, I don’t see their use cases developing too broadly for a few more years when companies like Microsoft and Meta release their Metaverse offerings and continue erasing the barriers between the digital and physical worlds.
