Non-fungible tokens (NFT) hit the market with a craze. The National Basketball Association (NBA) Top Shot is credited with starting some of the craze around licensed digital collectibles. Since that time the market on NFTs has subsided or better stated, receded to the mean.
Consumers have shown their interest and therefore value of the NFTs, which is reflected in the market size and price. The interesting thing with NFTs is that they are essentially a mix between digital collectibles and cryptocurrency—even at times NFTs are purchased with cryptocurrency that uses the same blockchain technology to maintain their integrity and individuality. It is the individuality of NFTs that give them their value as a digital collectible.
The beauty of a digital collectible is that it can really be anything—especially where the only requirement is that an NFT is a digital picture of an original item owned by someone. The cost behind blockchain technology is the largest expense of space and time. The NFT is licensed or purchased by someone where the original is retained by the owner. The essence of an NFT is that it is rare and therefore increases its intrigue and value.
The market for NFTs is ever-expanding because people who own the originals of things are finding that selling a single or multiple digital copies can be very profitable, but also offers the opportunity to share a piece of art (or any collectible) with another. Imagine, for example, a digital picture of a moment during an NBA game, but the NBA still retains the copyright to the broadcast and licenses it to a network or streamer, or an individual owner of the NFT.
NFTs are foremost an opportunity to profit from existing things, but it is also a unique way to share something and for that special someone to hold ownership over it. NFTs are now expanding into fashion and music. In fashion, the GIFs sold as NFTS can be used to promote a new clothing line or style. In music, a digital music stock market will allow for music fans and investors to own a piece of the music and retain royalties, but because of blockchain technology can also remove the middleman to give artists direct contact with their listeners, which also means artists will get paid directly and not through a licensing body, agency, or platform, etc. Albums as artwork and digital listening as NFTs to be sold have become a thing.
NFTs are really an introduction to what buying and selling things might look like in a metaverse. With NFTs, as with buying and selling anything, there is an issue of management, validity, and security. When someone buys an NFT, the person purchasing wants to make sure that the NFT is indeed valid and can be proven to be what it says to be.
With investments in technology growing, combined with name, image, and likeness (NIL) opportunities in college and high school athletics, and the sports betting explosion, cryptocurrency marketplaces like FTX are sister platforms to OpenSea to buy and sell digital NFTs that will continue to drive digital development marketplace beyond NFT collectibles.
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