Maybe your news alerts are blowing up with something about NBA Top Shot. Or maybe the tenth time your husband said “yes” to “what do you want to do for dinner?” you looked over his shoulder to see he’s been glued to some little website called NBA Top Shot, which is apparently the place basketball fans can buy, sell and trade official, licensed digital cards. Digital basketball cards? Sounds like a big nerd fest.
So what’s the big deal? Why all the fuss over something involving a team sport? Well, NBA Top Shot is one example of a major trend in cryptocurrency: NFTs, or non-fungible tokens. Confused? Good, it’s confusing. You’re not alone. The Verge’s Mitchell Clark explains: “‘Non-fungible’ more or less means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible—trade one for another bitcoin, and you’ll have exactly the same thing. A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different.” Their most significant purpose is their ability to affirm ownership over a digital asset.
For peace of mind, I needed to get to the crux of what this one specific NFT marketplace, NBA Top Shot, was since my husband seems, uh, absolutely addicted to it. And from what I’m witnessing, people aren’t just buying digital basketball cards because they love LeBron James—they’re prospecting, like frontiers people heading out West for the California Gold Rush. And they’re making real money. When drops are announced, tens of thousands of people get in line for a chance to buy a $9 pack they’re hoping includes a card they can turn around and sell for good profit—we’re talking hundreds, if not thousands, of dollars—in the Top Shot marketplace. And just like IRL basketball cards, the value of the cards can change based on athlete, team performance and off-the-field news as determined by the market.
These are not your dad’s baseball cards collecting dust in the basement. But the whole thing is still so…weird. So, I asked my good friend, economist Russ Bittmann, PhD. and self-proclaimed Top Shot crony, to help me understand WTF this monstrosity of everything I hate (aka, mostly sports) is. Here’s what he told me. (And these opinions are his own and don’t represent his employer’s. You get it.)