VIRTUAL MARKET ENJOYS ASTONISHING SUCCESS

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V24 2021 INDEX E-SYLUM ARCHIVE

The E-Sylum: Volume 24, Number 13, March 28, 2021, Article 32

We've earlier discussed how third-party grading and authentication services for numismatics later moved to the sports collectibles field, where much frenzied trading and innovation is happening today. This story discusses a new trading platform for purely virtual assets - could something like this enter the numismatic marketplace as well? -Editor

Fans have been flocking by the thousands to the Top Shot online platform to buy short videos of dramatic sequences from professional basketball games, as a new virtual market enjoys astonishing success among collectors, sports fans and art lovers.

To the untrained observer, one video clip showed NBA superstar LeBron James in one of his more spectacular moves; but it lasted no more than a few dozen seconds. On Top Shot, however, it instantly became a collector's item that sold on Monday for an eye-popping $208,000.

The video sequence is an "NFT" -- a Non-Fungible Token -- a virtual object whose identity, authenticity and traceability are theoretically indisputable and tamper-proof, thanks to the same "blockchain" technology used to ensure the security of cryptocurrencies like the hugely popular bitcoin.

After a slow start, Top Shot's business has exploded since January, generating more than $200 million in transactions since the start of the year, according to a Dapper Labs spokeswoman.

The Momentranks website, which says it provides "accurate, real-time moment valuations," puts the current value of the market at $1.8 billion.

Paradoxically, most of the video clips being sold can be viewed for free elsewhere on the internet, primarily on YouTube.

"I totally understand the initial reaction of 'I don’t get it' or 'This seems stupid,'" Jonathan Bales, who spent $35,000 for one "moment," wrote on his Lucky Maverick blog. "But guess what? There’s a whole generation of young, smart people who’ve grown up in a fundamentally different way from me and you, so whether or not we 'get' the future is irrelevant to how it will transpire."

Steve Poland, creator of the Mighty Minted site, recalled his own initial reaction.

"I signed up for an account, and then just instantly, it just clicked, it was like, this is the future. And this is now. And this is what collectibles are going to become in the future."

Fans of NFTs see them as an alternative to traditional collectors' markets that are often unregulated and opaque, whether involving sales of baseball cards or art works by masters.

"The technology is better than the offline world stuff," said Poland. "I mean, there are fake Picasso's out there, there are fake Van Gogh's out there (whereas) these are confirmed to be real."

NFT-based art, Davis added, is "on the threshold of becoming the next ingeniously disruptive force in the art market."

On Thursday, French soccer platform Sorare announced that it had raised $50 million from investors.

And the Italian-based Panini company, long involved in the trading-card business and other collectibles, said it has also created its own blockchain-based site.