When NBA Top Shot dropped the Holo Icon pack for $999, more than 25,000 collectors waited in the queue with just 2,673 packs available. Then, more than 50,000 collectors showed up to the latest Cool Cats pack drop.
No matter the price or the number of packs dropped, Top Shot sells out instantly.
What’s everyone buying?
Each pack contains cards called “Moments.” The moments are 10-16 second video highlights that show a player dunking, shooting, or passing. (Check out my Jaylen Brown.)
What makes a moment special?
Top Shot moments are the same video clips found for free on YouTube. But each moment has verifiable scarcity. This type of digital collectible is known as a non-fungible token (NFT). In Top Shot’s case, each moment has a unique serial number that can’t be replicated or messed with, and there can only be one owner for each serial number.
Most NFTs will likely die. It’s a new and unknown market. But NBA Top Shot has the best chance of going mainstream because it preserves many of the familiar aspects of sports card collecting while incorporating a more efficient and liquid market, better supply, digital clout, and collection aspect.
I’ll lay out the reasons why Top Shot is superior to physical cards, and why it appeals to a wider audience than traditional card collectors.
Top Shot’s Advantage
#1 – Liquidity
The value of your collection of moments is viewable at any time, and if you price your moment appropriately, it sells within minutes.
Compare this to physical cards:
To sell a physical card, you need to pick a marketplace, take pictures, place a proper value on your card, then list it. With multiple marketplaces and no easy access to a card’s sales history, it’s difficult to properly value physical cards.
On Top Shot, past sales and current moments prices are viewable at any time. It’s easy for a seller to determine a moment’s value and easy for buyers to find what they want.
With physical cards, once the buyer and seller agree on a price, the card needs to be shipped, which comes with added costs and headaches.
On Top Shot, the funds arrive in the seller’s account instantly. And after a few minutes, the moment appears in the buyer’s collection. There’s no shipping, wait period or chance of something going wrong.
The Top Shot marketplace is a huge improvement for buyers and sellers compared to the traditional card marketplaces, like eBay.
Because of Top Shot’s liquidity, owning a moment is more similar to owning a stock than a physical card, which may interest people who don’t want to deal with the headache of owning a physical card.
#2 – Verifiable Scarcity
Topps or Panini won’t print more cards than a card’s serial number indicates, but you can’t rule it out either.
And the majority of cards found in a physical pack aren’t numbered. Theoretically, there’s an unlimited supply.
Each moment pulled from a pack displays its supply limits. If the supply is still circulating, there’s a CC label on the moment. The moments with a circulating supply will eventually turn into a limited edition (LE) moment after the count is final.
Top Shot’s verifiable scarcity keeps things interesting and fair for the casual collector.
#3 – Grading
Most professional card collectors won’t buy cards that haven’t been graded by a professional authentication company like PSA, BGS, or SCG. But these grading companies aren’t perfect and can be fooled.
Digital collectibles can’t be bent or altered, and there’s no grading process. Each moment remains in perfect condition. You know exactly what you’re getting with each moment.
The casual collector who won’t spend a premium for a PSA-graded card is more likely to deal with fakes, forgeries, re-prints, and even unethical grading companies when making a purchase.
Top Shot’s transparency and digital nature are great for professional collectors, but it’s even better for the casual collector because it levels the playing field.
#4 – Extra Utility
Digital collectibles are harder to misplace. If you remember your account’s password, you know where your moments are.
Physical cards are just an image. It’s been a great system for years, but if I can choose between a freeze-frame of a dunk or a 12-second highlight clip of a dunk, I’ll take the video version every time. Why? I can watch how the player got set up for the dunk, the dunk, then his reaction to the dunk.
A moment doesn’t necessarily have to include a great player to have value. If there’s a moment of Rob Williams with a game-winning block for my Celts, I want to own that moment.
Two other aspects where physical cards can’t compete:
Top Shot challenges. Collect all the cards from a challenge by the deadline and get rewarded with a rare moment. With physical cards, you can collect all the cards from a series, but it’s not as fun or rewarding.
Digital clout. If you want to show off your cards, you need to take a picture and send it to a friend. With Top Shot? Just send your friends a link to your always updating profile. It’s way easier to brag now.
Why It’s Top Shot’s Time
Digital assets aren’t new.
Domain names were the first fully digital asset. A pronounceable four-letter domain can sell for millions. There’s value in having a short and memorable domain for your business, but you can run a successful business with a $8 domain too. We value short domains not because they’re necessary, but because they’re cool.
Digital assets have been huge in the gaming world for years too.
In 2005, someone bought a virtual moon in Entropia Universe for $500k.
In Counter-Strike, gamers buy skins for their guns.
In Madden and FIFA, there are Ultimate Team cards.
Many in-game digital purchases don’t give you an edge in performing better. They’re bought for digital clout or collecting purposes.
In the physical card space, some collectors buy cards without physically seeing them often or ever. Buying a fractional part of a card or piece of memorabilia isn’t new either.
If you can’t touch the items how do they have value?
These items have value because others believe they have value. A store of value is a belief system. Gold has been the number one store of value for thousands of years. Why? Because everyone believes Gold has value.
How about Bitcoin?
It’s worth more than a trillion US dollars, just 12 years after Satoshi mined the first coin. Bitcoin’s existence and success are proof that a digital store of value can work. Previous digital assets have laid the groundwork for new assets. There’s a clear path for sports cards to go fully digital.
Top Shot will be the first mainstream digital collectible because it retains the same players and collecting familiarity from traditional sports cards while providing a better version of scarcity, an improved marketplace, and a leveling of the playing field.
Who else gets involved?
How about die-hard sports fans who have been dreaming of a “player stock market”? Find young and undervalued players, watch them play better, and sell years down the line for a profit. Top Shot seems like it has all the elements to be the NBA player stock market. A fantasy basketball dynasty league, taken to the next level.
There’s potential for more traditional investors to get involved too.
NBA Top Shot’s got something for everyone. New audiences who have never considered physical cards, will want the digital version. And other professional sports will follow Top Shot’s lead.
Why I’m In
I grew up collecting baseball cards. In my early teens, I tracked down my favorite players on eBay to find new cards for the shelf in the bedroom.
My only requirements were that the card must be shiny (usually a refractor), and had to be one of my favorite players. I never thought of it as an investment. It was just fun. I loved to rearrange my cards, then trade with friends to upgrade the players on my shelf.
I signed up for Top Shot’s beta in July because it looked like an interesting combination of my interests: sports and crypto. But I didn’t think I’d be collecting virtual cards.
I enjoyed opening my first pack (“With the Strip” for $26), but I didn’t understand the platform. The buying and selling marketplace either didn’t exist yet or I didn’t notice it.
I pulled five random moments from my pack and kept them in my collection, but there wasn’t much I could do with them. Collecting isn’t fun or interesting when you’re the only one doing it.
I reluctantly stayed on Top Shot’s mailing list to stay in the loop, but I ignored all the drop emails.
In December, I realized Top Shot had a marketplace to buy and sell moments. I loved the idea. I didn’t want to spend more for another pack of “fake cards,” so I sold my #885/1431 Luka Dončić for $12.
A month later, I checked the value of my previously owned Luka and saw it was worth $1,200. (As of writing this, the last sale was $3,749.)
Holy shit. Everything clicked. These items are scarce, and there’s a marketplace with demand for them.
Top Shot is the perfect mix of all my interests. I’ve been hooked for the last five weeks, and I’m having a blast! It’s completely taken over my brain.
Digital assets might not make sense to everyone the first time, but eventually Top Shot will click for a lot of people.
Update 3/11: I wrote a follow up post about Top Shot Strategy.
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