Photo courtesy of Dapper Labs
NBA TopShot has taken over the media in the last couple months and everyone is talking about it. From stock market players to card collectors to everyday people, even SportsCenter has covered it. So what is NBA TopShot? TopShot is a website in which anyone can buy a digital pack of moments, and for less than $15 dollars why not?
People have been selling these $15 moments for hundreds of thousands of dollars. So why be against something which is making people money? Well, in theory it’s making them money, that is. So far only six thousand people have been able to cash out, with a $1000 limit every 48 hours. At that rate it would take over a year for the owner of the current highest selling moment to receive all the money in his account.
Nobody is quite sure who is forking over the hundreds and thousands of dollars for these moments, but evidently it is happening. In a free market where money is being exchanged in this capacity, something has to be going right, right?
The value in these moments comes courtesy of their being Non-Fungible Tokens, or NFTs. Now, I’m not even going to begin an attempt to explain how NFTs are connected to the blockchain, but in short this allows for these moments to retain some level of exclusivity. For example, a more rare moment may have a circulation of only 1,000 exact matches, while that number could rise into the hundreds of thousands for a more common moment. In this, the market becomes similar to population counts as they are referred to within the trading card world. Essentially, the feeling of owning a finite resource gives these moments 99.9% of their value.
You may be wondering what sorts of moments are available, and unlike trading cards, TopShot offers NBA highlights such as an individual players’ steal, block, assist, or field goal. Where I take issue with this model is that I believe most rational people would rather type in a quick google search rather than pay upwards of $200,000 for a LeBron James windmill dunk.
At the current time, the only way to acquire these packs containing moments is through a limited drop system that TopShot offers. When they do so a queue is created, and only so many people in that queue end up with the opportunity to purchase a pack. To my knowledge, when they do so only about 1 in 3 or 1 in 4 people are able to secure a pack at the current rate of 60,00 packs per drop. In turn over 100 thousand people are missing out and thus demand is created.
So where is TopShot going? There are really just two widely expected options. Some say that it will go to the moon like Bitcoin has in recent years, and others expect a GameStop like fall from grace due to the quick peak. In my personal opinion I think this is a fun new investment, and perfectly fine if you look at it as that.
The moment you pull something big may put some serious cash in your pocket someday. I personally am not bullish on it, but as many things in life go the train is going to come by only once, so you either hop on to see where it goes or let it speed by. For TopShot I will be watching from afar, just hoping I’m not missing my ticket to the moon.