DIGI COLLECTIBLES

How NFTS and other digital collectibles could change the way we collect

So far in 2021, a 1952 Topps Mickey Mantle Rookie Card sold for a record $5.2 million, a 2018-19 National Treasures Luka Doncic commanded $4.6 million, and a 2000 Playoff Contenders Tom Brady bought $2.25 million at auction with another one pushing that sum in auction.

ese jaw-dropping numbers have attracted major national media attention and scores of new and returning collectors to the hobby. But the surge of money isn’t just going to traditional physical cardboard. e unprecedented boom of the sports card industry is colliding with digital collectible assets. Some are commanding up to six-figure transactions, creating a new segment of the sports collectibles industry that is simultaneously enthralling and confusing. NFTS, blockchain, digital ledgers… some say they are the future. Others say it’s all just a fad. Some doubt the long-term value while others think they will change the way everyone collects. Most of us are still trying to figure out what the heck they are.

One thing is undeniable: these digital sports collectible assets are here and are commanding serious money. An NBA Top Shot Lebron James “dunk” moment sold for $200,000, and a “block” moment sold for $100,000. Some Panini Blockchain cards have brought thousands of dollars. We’ll get into these specific assets and digital collectibles later, but first, let’s discuss what we’re dealing with and why they are commanding so much attention.

Dissecting the What and the Why

So, what’s an NFT? In online trading groups, it’s short for “not for trade,” but in the digital asset world, it means “nonfungible token.” Essentially, it’s a one-of-kind digital asset or unit of data that cannot be divided into smaller parts or paired with something else. It could be an image, video or even music. Basically, it’s a way to own “the original” digital asset much like someone can own an original painting that has been copied thousands of times. ere is only one original. So, think of NFTS as the digital version of owning the one and only original piece of artwork.

Instead of focusing on what they are, perhaps it’s better to ask, “Why NFTS?” Why have non-fungible tokens — a term that has almost solely been linked to alternative digital currencies— made their way into the sports collectibles hobby? e answer might be in the revolutionary technology generating in the background, which brings us to blockchain. If NFTS are football players, blockchain is the field they play on.

e authenticity of NFTS (again, a digital asset or data unit) is stored on a blockchain, which can be a mindbender of its own to understand. is ultra-advanced encryption technology is a digital ledger to track every transaction of the digital asset, and it’s is open for anyone to see and verify. Blockchain has been synonymous with cryptocurrencies such as Bitcoin or Ethereum. However, NFTS and blockchain as it pertains to the rising trend in the sports card hobby aren’t necessarily linked to alternative currencies.

Let’s fast forward to the practical application of blockchain technology pertaining to the sports collectibles hobby. e main attractions are authenticity, trackability and transparency. Imagine being able to track and verify every transaction of a specific 1954 Topps Hank Aaron Rookie Card throughout its history. at’d be cool!

Of course, the trend we see in the hobby isn’t with physical cards (at least not yet). Digital cards and video clips lead the way for now, including Panini Blockchain cards, Dapper Labs’ NBA Top Shot, and the recently released digital version of 2021 Topps Baseball. Some of these are backed by physical trading cards.

Digital sports cards and experiences aren’t new, but they certainly have been short-lived at times. Remember Upper Deck Powerdeck and etopps from the late 1990s and early 2000s? Powerdeck was a card-disc featuring video clips and player data that could be played in a DVD drive. e etopps cards were a combination of digital and physical. Digital cards could be purchased on demand much like what we see with Panini Instant and Topps NOW today. At any time, you could sell your etopps cards on the digital Topps platform, or have a physical card sent to you.

Spending money on digital assets that you’ll never hold in your hand has exploded into a massive market today.

e revolutionary videogame Fortnite raked in $1.8 billion in 2019 according to Investopedia.com. e game is free to download and play, but money can be spent on endless upgrades. Today’s digital collecting assets are attracting major national media attention and forcing traditional sports fans to pay attention to sports collectibles, which is always a good thing for the industry.

NBA Top Shot

Perhaps the most widely popular form of NFT collectible is NBA Top Shot by Dapper Labs. ink Sportscenter highlights meshed with trading cards. ese Nba-licensed highlight video clips (called plays) depict NBA players most impactful moments, such as a ferocious dunk or block. e moment is marked with the date and game in which it happened. In some sense, the video clip takes the place of a picture on a card.

Like cards, they are organized into sets. For now, these include Base, Rare and Legendary sets. ese clips are

issued in digital packs, but include just one video clip per pack. Each clip is sequentially numbered to the order it was created and verified on the blockchain. Also similar to physical cards, lower serial numbers or those matching a player’s jersey number can bring more money.

If a serial number is limited or labeled “Edition Size,” then there will never be another unit created of that particular play. If it is labeled “Circulating Count,” then new units will be created of that particular play until a new play of the featured player is rotated into the set. Of course, particular units of a play can be bought or sold on the Top Shot marketplace, which shows the current owner of each unit. Some have already sold for $100,000 to $200,000. Top Shot has commanded nearly $500 million in sales with more than 800,000 registered accounts. However, these assets aren’t just for sky-high prices. More than 1 million transactions fall between $10 to $50. e platform also allows users to show off their collections and share on social media. e Top Shot idea could certainly be replicated in other sports leagues, and perhaps even the entertainment industry.

Panini Blockchain

Panini Blockchain fully launched in January 2020 as a platform allowing collectors to own, trade, sell or auction digital assets much like they do with physical card. As described earlier, every transaction is recorded on Panini’s private blockchain digital ledger. is ensures each digital card or asset cannot be duplicated or what collectors would traditionally call “counterfeited.” Each Panini Blockchain card is a one-of-a-kind digital asset. Some cards include a physical version.

e program launched with cards of 100 different athletes across several sports featuring Panini’s flagship National Treasures design and levering the company’s exclusive league licensing agreements. Designs from other popular brands have been used since then such as Flawless and Prizm. Some digital cards feature signatures and logo patches. Of course, being digital, the cards are rendering designs. Purchases are tied to U.S. dollar so there’s no need

to acquire a form of digital or crypto currency.

Jason Howarth, Vice President of Marketing at Panini America, says before the launch of the blockchain platform, the company took a hard look at where digital card assets traded on a private blockchain platform fit within the DNA of the trading card industry. “Blockchain gives the customer the ability to know who has the cards and whether or not they’re available,” Jason says about the benefits. “It also reinforces another level of authenticity on a specific card, especially if you tie that NFT to a physical card.”

Jason thinks the emergence of digital collectibles and blockchain technology will only enhance the collecting experience for a wider range of collectors and attract more people to the industry. He also says to look out for Panini Blockchain packs to launch in the coming months.“e way people collect and how people collect continues to evolve,” he says. “I think long term it enhances the value of the physical cards, it creates another opportunity in the marketplace.”

Topps Digital

is year marks 70 years of Topps Baseball. To help celebrate, a digital NFT version of 2021 Topps Baseball Series 1 released in April. is follows a successful launch of the company’s digital 2020 Garbage Pail Kids tracked and verified on a blockchain run by Worldwide Asset exchange (WAX). e WAX blockchain is used for the baseball release as well, allowing collectors to track and verify every transaction of each digital card. It’s a fortuitous partnership with a company named “WAX” considering Topps once used dabs of wax to seal baseball card wrappers to protect the cards and help deter pack tampering. Topps declined to comment on the digital set release.

Similar to Garbage Pail Kids cards, several digital Topps cards feature themed and animated backgrounds or borders. Each digital pack is $5 with a maximum of 50,000 packs available. Each standard pack contains six digital cards with odds of getting cards from different rarities as follows: