‘What the hell are NFTs?’ I am asked as Jack dished out the writing assignments this week.
Somehow I lucked out with the task of writing about the role of NFTs in Sport. He must have thought it a good idea for me to explain NFTs as the resident ‘IT guy’. But in truth beyond the very basics I’m as clueless as many others.
Instantly I am full of regret for discussing my dismal crypto investments. And then I check my deadline and sigh…
What are NFTs?
What I know for certain; NFT is an acronym for Non-fungible token. Then I take to Google, grab a pen and paper and make a reasonable effort of learning some more. Mainly so I don’t have to end this piece right here!
So the meaning of Non-fungible more or less, is when something is unique and cannot be replaced.
For example if you leant your mate a pair of football boots. Which they then lose in the changing room on Sunday after a 15 minute super sub appearance. These football boots could easily be replaced with another pair of the same off the shelf in the local Sports Direct.
You’ve ended up with the exact same item albeit newer. Simply because many items in circulation are not non-fungible.
Imagine instead that the boots lost were true one of a kind never to be replicated items. Such as those that Ian Thompson wore in the Cherries famous 2-0 win over Manchester United in 1984. Where could you ever get another pair? These would be non-fungible.
But instead of physical items like boots. NFTs are non-fungible tokens. Unique cryptographic digital tokens that exist on a blockchain and cannot be replicated.
To confuse matters further NFTs can represent real-world items. Like artwork or other property. So perhaps they could also be considered a digital record of ownership. Or digital passport/receipt/deed.
Where does crypto fit in?
Most NFTs are part of the Ethereum blockchain. For the uninitiated, I am jealous of you. Etherium is a cryptocurrency (one I wish I hadn’t heard of!).
But the important part to note in this explanation is the block chain.
The blockchain is another concept we should understand. In fact it is the reason cryptocurrencies are being taken seriously by real banks. The old school type that hold money and other physical assets in vaults. It is the technology upon which crypto currency is traded.
The block chain is a distributed ledger or record of transactions. It keeps track of who’s holding and trading NFTs.
I am Jack’s lack of confusion
Blockchains are very secure. Hence why real banks are really interested in them. Because multiple copies of these ledgers are stored across many computers. All linked in a peer-to-peer network.
So should someone wish to ‘steal’ ownership of a token they would have to insert a record of a fake transaction into every copy of the ledger. No easy task. Just one copy of the ledger being out of sync with the others would trigger an investigation.
For all those of you over 20 do you remember Fight Club? Did you spot the quote in the heading title? Near the conclusion of the 1999 movie, Tyler Durden plans to blow up the buildings where credit information is stored. Erasing all the banks records of debt. And resetting the world economy.
Over simplified somewhat for the purpose of the movies story line. But a great illustration for this article nonetheless. What chance would Tyler Durden have of blowing up 50 such buildings at the exact same time?
How does football fit in to the NFT discussion?
Even the most technophobic football fan might by now have winced at the mention of NFT. After all WAGMI United (a crypto company) now own League Two outfit Crawley Town FC.
Crawley Town and their official kit manufacturer ADIDAS plan to release a series of NFTs together too. Which they hope will release funds to finance Crawley Towns rise to the Premier League…. But watch this space on that one!
NFTs have even been promoted by football royalty in recent months. Names such as Leo Messi, Kylian Mbappé, Cristiano Ronaldo. Even Michael Owen and Steve Sidwell have gotten in on the act. Proving they might know more about NFTs that the TSFS ‘IT guy’. Which means it might be time to hang up my hat.
But where is all this going?
Well the US memorabilia market is massive. It dwarfs the UK!
And the Americans do love new shiny things. Many sports clubs and organisations (depsite some outspoken opponents) are embracing NFTs. But more so the extra revenue it is generating from fans!!
The NBA are fully embracing the money in NFTs. In partnership with Dapper Labs, the creators of CryptoKitties they have created their own NFT marketplace. Called NBA Top Shot. They even have investment from high-profile NBA legends. Including Michael Jordan himself!!
Fans buy, sell and trade basketball digital assets based on video clips from NBA games. Other sport based NFT marketplaces are also available including NFL All Day and UFC Strike.
Why would you spend real money on cryptocurrency to trade for a NBA video clip… I mean NBA NFT?
The video highlight clips sold as NFTs on NBA Top Shot are singular moments within the game. Clips of a specific play. A LeBron James dunk for instance, or a Steph Curry layup.
Like American sports trading cards, the value of Moments is based on their rarity. The rarer the video clip, the higher its potential value as a collectable.
But these video clips can be watched on Sports Centre, during the game ‘live’ even on YouTube. Why would you buy it?
Every office and school has a printer. Why didn’t people print their own trading cards from photos or images?
Moments are more than highlights. These NFTs are officially licensed by the NBA and minted with a unique serial number. And integrated is data, including game and player stats.
They are basketball history! And the NFT is the certificate of authenticity.
NFTs and football
With all the money floating around ask yourself how long will it be before either the FA or Premier League try get in on this action? Football NFTs are on they way. I for one would be very surprised if they aren’t in the making right now!
Imagine it, no tie in or sharing profits with an external printing, manufacturing and publishing companies. Simpler logistics and near instant global distribution online!
These NFTs could quite soon realistically replace the traditional Panini sticker book.
Or you could just buy into Cryptokitties! Now excuse me while I try figure out how we can frame a Football NFT……
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