Non-Fungible Tokens [NFT] are digital files containing digital artwork, digital collectibles, music, sports cards and in-game tokens. They can be purchased via online auction markets, allowing the buyers to own a piece of media. The identity of the media is verified by a blockchain-style technology, where the purchase certificate includes a reference to a cryptographic version of what the NFT represents, as well as unique blockchain identification codes and metadata that distinguishes them from another. Non-Fungible Tokens cannot be replicated or copied, thanks to their blockchain technology, however they can be bought via cryptocurrencies and resold through the same medium. The online purchasing opportunity removes intermediaries, simplifies transactions, provides an enhanced security within the purchases and creates new virtual markets, demonstrating a fast-paced, modern change in the industry.
With the NBA’s popularity only continuing to intensify across the Globe, and the current online life the world has acclimated to, it was only natural for the NBA to go partially virtual as well. With NBA players being distinguished for their history-making, game-changing moments, putting those celebrated events up for sale to the public was the next best, and smartest, idea for the National Basketball Association. They have allowed fans to own their favourite player’s highlight clips.
The NBA launched Top Shot in 2019 as a marketplace for NBA highlight reels to be purchased, collected and traded through a flow-blockchain technology; part of a larger group of blockchain-based digital collectibles also known as Non-Fungible Tokens, and is similar to the cryptocurrency used to purchase bitcoins. The site has since generated over $230 million in sales. While purchasers can trade their NBA NFT’s, they are not able to exchange them for another of equal value, as they are secured as digital possessions, rather than physical possessions. Each NFT moment contains a digital barcode, which certifies that the buyer owns the specific video clip from NBA Top Shots. They can be related closely to collectible sports card memorabilia.
The packs’ prices start at $9, with each pack guaranteed to include a certain number of common, rare or legendary moments in NBA history. Each tier represents the rarity of those moments in circulation, with the ‘rare’ or ‘legendary’ category encouraging the value of the NFT to be worth more than those in the ‘common’ category.
When someone purchases an NBA NFT Top Shot, they will not own a piece of physical property, and the video highlight will still be available for others to watch online for free. The 10-15 second game video of a star player, will also be completed with an NBA brand logo. The owners are able to sell their highlight reels for a price they choose, however the prices for the NFTs rise and fall like a company listed on a stock market.
The highest purchased NBA NFT featured LeBron James’ historic dunk for the Los Angeles Lakers, having been sold for around $200,000. A highlight video from NBA star, Zion Williamson, is a close second, having been purchased for $100,000. This demonstrates that NBA Non-Fungible Tokens are the next best thing in sports memorabilia by allowing fans to own a piece of sport history.