For the past couple of weeks, my Twitter feed has been consumed by something called NBA Top Shot. If you aren’t familiar with this, Top Shot is the new market for virtual NBA trading cards, aka moments. Most of the people on my timeline are either all about it, or are super skeptical of it. I have fully dove into this world and I’m ready to answer any questions you may have on it.
NFTs are the Future of Collectibles
NFTs, or non-fungible tokens, are digital assets that are held on the blockchain. This means that the moments being sold are non-replicable, verifiable, and cannot be forged or manipulated.
People from Gary Vaynerchuk to Mark Cuban are among those bullish on the future of NFTs, and NBA Top Shot particularly. Many people have adopted NFTs as the future of not just collectibles, but many other markets as well. From Logan Paul to Shaun Mendes, this space has been taking off in recent weeks.
However, the large majority of people haven’t heard of these or have a lot of questions on them. I asked around at Student Union and got some of the main barriers to entry/confusion points about NBA Top Shot that I’d be happy to answer on.
Why would you pay for that when you can buy it on Youtube?
In the same way that you can find the picture on the front of a Michael Jordan rookie card or the Mona Lisa on Google Images, you can find these moments on Youtube (or anywhere else online). But holding the actual asset that no one else does is what gives it value, the same as those other collectibles. It is not a physically tangible object, but it is still a real thing that exists on the blockchain and is your own property.
You don’t physically hold the money that is in your bank account, you use a debit card. You don’t physically hold video games that are downloadable to your system, but they still have value. Just because something doesn’t have a physical presence, doesn’t mean that it doesn’t exist in the real world. Once you can get past the mental barrier of your idea of physical ownership, the easier it becomes to adopt this new world of assets.
Start Up Costs
Right now the market is high due to the demand/supply imbalance. There is a slight barrier to entry in the marketplace, but you can still buy some of these lower priced moments of players you like. Just don’t expect to hit it big off of these common moments.
Lack of Pack Availability
The easiest way to get involved from a price standpoint is by buying packs. Because of where the market is right now, getting a pack is positive expected value and turns you an instant profit as soon as you get one. The problem has been actually getting a pack. Because of this demand, there are hundreds of thousands of people lining up every drop for a chance a 5-10,000 packs. Most of the time, with those odds, you aren’t even sniffing the front of the queue. Dapper has said that in the future they hope that common packs are available for everyone to purchase at all times, much like you would buy a pack of baseball cards in your local grocery store. This, however, will have to come when the supply doesn’t outweigh the demand so drastically, which means that these common moments while have to be devalued much more.
Fund Withdrawal
This is the thing a ton of people seem to be getting hung up on. While some users have the ability to withdraw funds from the platform, the large amount of people don’t have this ability yet. Due to KYC verification and Anti-Money Laundering rules, Dapper is having to properly vet everyone before you are able to withdraw funds. The issue is that the platform blew up before they were ready and they only had one person working on this verification process. Just because you can’t withdraw funds right now doesn’t mean you won’t be able to in the future. This just takes a bit of patience and if you truly believe in Top Shot, you aren’t just trying to pull your funds out immediately anyways.
Where Does NBA Top Shot Go From Here?
I believe that this recent spike is just the start of what is to come. With the all star game and the playoffs coming up, even more eyes will be on the NBA in the coming months. This isn’t to mention that NBA Top Shot has not even been advertising yet. In order to make sure the systems are running correctly, they have forgone short-term growth through marketing for the reliability of their system, which is a respectable thing to do. The top-dogs at Dapper Labs are engaging with fans on social media and very transparent about what is going on. Once the league starts to push the product, I think we see things take off even more.
I’m not telling to throw a bunch of money into Top Shot or not; that is your own decision. I am a believe in the product myself and am happy to answer any questions that you may have on it. Reach out to me @CodyGoggin on Twitter and I will be happy to help!
