If you’re a basketball fan who spends time on the internet you may have already heard about NBA Top Shot, a new company that has somehow created a little economy in which people are spending thousands of dollars on digital NBA highlights that can otherwise be viewed, easily and for free, basically anywhere on the internet. If you find yourself frowning at your screen right now, trying to figure out just what the hell could possibly be going on here, well, you and me both, buddy.
Happily, ESPN’s Brian Windhorst is here to help make some sense of things. In a story published today, he explains how and why NBA fans are willing to spend real money on short clips of like LaMelo Ball shooting a three or Zion Williamson blocking a shot. You may not be surprised to learn that it mostly has to do with the blockchain and speculative investing:
“Blockchain is unique. It can deliver value to intellectual property owners downstream,” said Adrienne O’Keeffe, NBA associate vice president for licensing. “We do believe blockchain technology has staying power and a lot of promise for our business.”ESPN
In the basic sense, Top Shot is like a trading card. Its users buy, sell and trade video clips of players called “Moments.” They can be bought in packs and opened (starting at $9) just like traditional trading cards where the contents are a surprise. Or they can be bought individually in a wide range of specialty collections aimed to create exclusivity. The collectibles are then stored in virtual wallets.
The most charitable way to look at NBA Top Shot is to view it as something of a digital trading card company, with the only difference between it and Topps being that Top Shot creates a marketplace for digital collectibles rather than physical ones. A less charitable reading would see the people behind Top Shot feverishly trying to create an inflated, speculative market that they will escape with a lot of money at some point before it all comes crashing down. And, well, would you look at this:
Like any investment, especially one that spikes like Top Shot has, there is the reality that it could collapse. Dapper Labs’ first major project was called CryptoKitties, a game launched in 2017 that involved virtual cats. Like Top Shot, it became very popular and values of the digital collectibles exploded—one digital cat selling for more than $170,000—only for the items to plummet in value after the fad passed, bearing some resemblance to the Beanie Babies craze of the 1990s.ESPN
Even if you put aside any questions about whether NBA Top Shot is just blowing up a CryptoKitties-style bubble or simply forging a new path in 21st-century memorabilia collecting, there’s still something inherently off about real money being exchanged for things that people will never actually be able to hold in their hands.
That is not a phenomenon that’s exclusive to the collectible trade, of course. When people buy music and movies and TV shows these days, they are mostly buying access to digital copies of those things that only exist on some anonymous server. But that’s crazy, too! What happens if the tech company that owns the rights to a particular movie or song loses those rights, and is subsequently forced to remove it from their digital library? What happens if NBA Top Shot goes out of business or loses its official licensing deal with the NBA, and can no longer incorporate highlights into their collectibles? Does anyone really own something that can just vanish into thin air one day?
There’s also something to be said for the degree to which NBA Top Shot’s entire model seems to depend upon prioritizing and encouraging the most bloodless, joyless aspects of memorabilia buying and selling. The whole business seems to have very little to do with people actually “collecting” Top Shot clips in any meaningful sense of the word, let alone treasuring them. There’s just a whole lot speculative investing going on, the point of which is to get rich.
There’s also plenty of that in the analog version of buying and selling cards and autographs, naturally, but even the guy who buys a rookie card on eBay just to keep it in a hermetically sealed envelope for 5 years before eventually selling it for a profit is making contact with a larger world. There is a tangible thing involved, and it can be possessed. Maybe that card gets sold to a father who wants to give it to his son as a gift, or to a teen who wants to display it proudly on his night stand, or to a kid who will hold onto it for 50 years and one day hand it down to his own kids, like a family heirloom that happens to have a picture of Alex Bregman on it. What exactly are you supposed to do with a Top Shot collectible other than try to sell it? Show it to people on your phone for as long as the platform upon which it exists remains accessible, I suppose.