I offered $100,000 for a 10-second NBA video clip that you can view on the Internet for free, and was told No Thanks
I wasn’t sure how to start this blog post out. Do I tell you that I don’t even watch NBA games and have probably only seen a few games in my life? Do I tell you that a little over a week ago I didn’t know a thing about NFTs? (What I just offered to buy is a NFT, a “non-fungible token”)
Neither of those statements felt like they were going to give me any credibility with you.
Alright, alright, I can already feel you judging me. You think I’m some crazy person, because I (with some other investors) would spend $100,000 for… a 10-second video clip… that anyone including yourself can view on the Internet for… free?!?! And then I tell you that I don’t even watch the NBA?!?? And that I didn’t know anything about what I just purchased a week ago?!?!
Here is the video clip for free to view on YouTube:
And now here is a screenshot of the “Moment” I wanted to purchase (Serial #1), which you can click to view the same video above, which is Los Angeles Lakers superstar LeBron James paying tribute to Kobe Bryant by performing a near carbon-copy of a two-handed reverse windmill slam against Western Conference foes the Houston Rockets on February 6, 2020:
If this were 5 years ago, you would have found it crazy if I told you I was spending $100,000 for 253 of these digital coins called Bitcoin.
But today if I told you that I just paid $100,000 for ~3 Bitcoin, you probably wouldn’t find that to be a crazy idea, and you probably wouldn’t be reading this article, would you? Note: that $100,000 investment in Bitcoin 5-years ago would be worth $8.6 million today.
What if I told you that I was the original “owner” of the Twitter accounts for all the major pro sports leagues?
75 million people now follow @NBA, @NFL, @MLB, @NHL, and @NASCAR on Twitter, and I was the person that originally registered those username accounts on Twitter back in March 2007. (I also registered 1,200 other accounts including most every single pro sports team on Twitter.)
Now that’s a story for another day, but what you need to know now is the end result from what happened when I had the “AH HA” moment and was CONVINCED that this Twitter thing was going to be MASSIVE before most of the rest of the world. Twitter grew, they took those user accounts from me, and I made $0. Nothing. Zilch. I didn’t own anything. And I couldn’t invest in Twitter the company, because they were a tiny startup business that was funded by venture capital funds and “accredited investors” (people with a net worth higher than $1 million). I hated that I couldn’t capitalize on this knowledge.
I’ve only felt this a few times in my life.
That feeling when I learn about something, have the “AH HA” moment, am CONVINCED that I just saw “the future” (NOW) before most of the rest of the world, and that this something is going to be MASSIVE.
That feeling happened a week ago for me and that something is NBA Top Shot.
What is NBA Top Shot?
NBA Top Shot is a website that was built by this company Dapper Labs in partnership with the NBA. On the website you will find lots of NBA “highlight worthy” video clips that are each 5-10 seconds long. These short video clips feature certain NBA players in specific NBA games doing dunks, layups, 3 pointers, steals, blocks, jump shots, assists, and the one I had never heard of… handles.
You can watch these video clips for free on www.nbatopshot.com, just as you could watch them for free (albeit probably with a commercial) on YouTube or NBA.com.
What is unique about NBA Top Shot video clips is that they are digital collectables. These video clips are packaged up and called a “Moment".
“OK, so, then do you own copyright of the video clip and earn money every time it is played on the Internet or on TV?”
No, it’s not like that. The NBA owns that original artwork, which is a video clip, and they have licensed the artwork to be packaged up as a digital collectable called a “Moment.” Just like if you bought a sports card — you don’t own the original artwork of that card (the photograph; the design) and you don’t earn any money every time that photograph is reprinted in a newspaper, magazine, or book.
In layman’s terms, “Moments” are kind of like physical sports cards, but different.
Just like a physical sports card…
depending on how many are produced can tell you how scarce the Moment is.
there is an athlete that is featured in a Moment.
there is an owner of a Moment.
if demand outweighs supply, the price goes up for the Moment.
you could simply Google it and see what it looks like for free.
Just like a physical sports card (or any alternative asset that people collect like paintings, purses, books, cars, etc.), an older Moment could be more valuable than a newer Moment, and vice-versa.
Unlike a physical sports card…
you can’t hold it.
you know exactly how many “Moments” are produced. (Today, you still don’t know how many of certain physical sports cards are produced.)
there is an online ledger for all the world to see showing the ownership of each Moment, so you can be assured that if you purchase a Moment, it is not a fake.
if you ever sell one, you will not need to package it up in a box, go to the post office, and ship it.
if you ever buy one, you will not need to wait for days to receive one or worry about it getting lost in the mail. You own it instantly.
Where do Moments come from?
Dapper Labs in partnership with the NBA, creates Moments. New Moments are minted (aka “added”) to the ecosystem by Dapper Labs. Think of “minting” by Dapper Labs as “printing” by a sports card company (Topps, Panini), except that with minting on a public online ledger, everyone knows how many Moments have been produced. This public ledger is blockchain-based, but let’s not get into technical details in this article.
Dapper Labs then (virtually) packages these Moments up into packs, just like sports cards. You purchase a pack and understand how many Moments will be in the pack (i.e. 4) and whether your pack will contain any rare/limited Moments from Sets (i.e 1). However you don’t know what Moments you will get, it will be a surprise to you.
There is typically* a specific amount of packs that originate, based on the limit of Moments that exist. Once these packs sell-out, they are gone forever. *I said “typically”, because there are something called the Base sets, which are considered “common” (not rare) Moments, which can continue to be minted by Dapper Labs. Everyone is aware of how many of these common Moments exist.
An example Set is the Cosmic set from Series 1:
This set will only ever contain one play from each of the 30 teams from the 2019/2020 NBA season, and features players like Zion Williamson and Ja Morant, hand-selected by fans like you! Only 49 of each of these Moments will ever exist.
There are only 49 Moments in the Cosmic set (Series 1) of each player, such as Ja Morant, which are numbered. Back when the Cosmic packs were on sale (they are sold-out), you could have purchased a pack and would have been guaranteed 1 Cosmic set Moment in your pack, but not knowing which one you were getting. For example, you may have bought only two packs, but received the same athlete Moment, but they would be numbered differently, such as Ja Morant #5 and Ja Morant #36.
Thus doing a little math, there are a grand total of only 1,470 Cosmic set Moments from Series 1 (=49*30). That is it.
There will never be more than 1,470 Cosmic set Moments from Series 1 in existence, EVER.
Why? Because there is 100% transparency on NBA Top Shot as to what Moments exist in this ecosystem/marketplace. If you’re a programmer, you could see the public ledger online and see all of the Moments that exist that have been distributed by NBA Top Shot.
Alright, so what if you didn’t buy a Cosmic pack back when it was on sale, can you own a Cosmic Moment now? Yes. Your other option to own Moments is to view the NBA Top Shot Marketplace and buy Moments from others that have them listed for sale. You can buy a unique Moment for as little as $1, using your credit card. (You could also purchase using cryptocurrency like Bitcoin or Ethereum.) Not sure what to buy? Here’s a NBA Top Shot Buyer’s Guide that just popped up from a user with some ideas/tips for you.
Some websites have sprouted up (CryptoSlam! and intangible.market) that monitor the public ledger and then display information on webpages for you and me. The information they are displaying includes recently listed Moments for sale, sold, all Moments that exist for a specific player, all Moments for specific teams, etc.
Alright, speed this along, why do you think this is going to be MASSIVE?
Jonathan Bales wrote an excellent article that outlines a lot of great thoughts about why he believes this market could be huge. I highly recommend you read that article for his reasoning, because I’d rather just not copy/paste it here. Bales went in with a few guys (including Adam Levitan) to purchase the serial numbered #1 (of 49, Series 1 Cosmic set) Ja Morant dunk Moment last week for $35,000.
Levitan mentioned in his podcast (13:46 mark, Episode 155) a couple of days ago that one of the reasons he was “in” on purchasing this Moment is:
Anything that was popular traditionally, is clearly going to be popular in the digital form. You use to get an autograph from a celebrity, and now you just get a Cameo. You use to get into a taxi cab, now you get an Uber, and eventually a self-driving car. You use to like collecting basketball cards, and now you can do it on the blockchain.
The kids are already use to buying digital goods
So are a lot of adults. Remember Farmville? That was born in 2009. People would buy in-game currency for that game to buy in-game items like seeds. I’m sure there are even earlier examples than Farmville, but with 83.76 million monthly active users at its’ peak in 2010, it has been at least 12 years of people getting used to buying digital goods. Today, kids are buying digital goods in Fortnite ($1.8 billion revenues in 2019 from 250 million players), Roblox (over $1 billion lifetime revenue as of November 2019), Minecraft (126 million monthly users), etc.
People make investments. And investments in alternative asset classes (i.e. sports cards) is BOOMING.
This baseball card from 2009 recently sold for $3.84 million. That was the highest sale of a sports card in history, as of last summer.
A 1952 Mickey Mantle card just sold for $5.2 million last week, which is now the highest sale of a sports card.
In 2019, there was $600 million of sports cards transacted on eBay. That’s just the secondary market. And I can assure you in 2020 that number was probably $1 billion considering the growth in that industry.
NBA Top Shot is ONLY THE BEGINNING. This digital collectables market is going to be MAMMOTH.
This isn’t Dapper Labs’ first rodeo. In 2017, Dapper Labs came out with a “game” on the blockchain called CryptoKitties. This “game” allows players “to purchase, collect, breed and sell virtual cats. It is one of the earliest attempts to deploy blockchain technology for recreation and leisure.” Each CryptoKitty is unique, serial numbered, and verifiable on a public online ledger that keeps track of its’ authenticity. Here’s an example of a CryptoKitty called Dragon:
In September 2018, that CryptoKitty above called Dragon, was sold to someone for $170,000!
There are other digital collectables being sold online too. There’s a game called F1 Delta Time that has had some purchases over $250,000, there’s plenty of digital artwork that is being sold including No6 Genesis for $111,000 at the time, and much more.
All-time across all NFTs (i.e. CryptoKitty, Cryptopunks, etc), there has been 5.2 million sales for a total of $162 million. These are digital collectables that people are buying/selling. And I’d tell you, none of them are mainstream. No one in your family or circle of friends has likely heard of any of these (unless you’re a blockchain nerd; no offense blockchain nerds):
In total, there have been 2.8+ million sales of CryptoKitties with a total volume of $38+ million amongst 1.5 million users.
Above are the highest sales of a CryptoKitty.
In addition to that $173,000 that someone paid for a CryptoKitty (essentially a JPEG that you can Google to view), other people have paid (FOR DIFFERENT KITTIES): $116K, $114K, $111K, $110K, $105K, $103K, $89K, etc.
Cryptokitty has had an estimated 1.5 million users who are responsible for the nearly $40 million worth of transactions on its platform. NBA Top Shot has an estimated 12,000 active purchasers at the moment. Last week, a Moment of a dunk by Lebron James as an homage to Kobe Bryant sold for $47,500.
It took a couple days before that price was shattered. Yesterday there were two record-breaking sales of Moments for $100K each!
Let me just say this one more time…
Someone paid $173,000 for a digital graphic of a kitten.
Do you think someone is going to pay $173,000 someday for a digital video clip of Global NBA Star Lebron James doing a dunk that’s an homage to Kobe Bryant?
Well, I do.
Someday, someone will probably pay MILLIONS for it.
NBA Top Shot just surpassed peer to peer trading volume of $7 million IN JUST THE LAST 24 HOURS with only 17,000 users. The NBA is a global brand and a global sport. 300 million people in China alone, play the game of basketball for fun.
Just 17,000 people have transacted $25 million!
This is just the beginning.
Dapper Labs needed a global media brand to test this idea of digital collectables with after proving traction with CryptoKitty. As expected, that brand was the NBA, the most progressive league in all of pro sports with NBA team owners including a who’s who of the technology world (Mark Cuban, Steve Ballmer, Joe Lacob, etc).
The Dapper Labs / NBA collaboration that is NBA Top Shot, has been proven. Next up will be off-shoots of NFL, NHL, MLB, NASCAR, and let’s not forget the biggest global sport of them all (just not very popular in USA): Soccer. In addition, Dapper Labs has investment from Warner Music Group. AKA there’s going to be Moments for musical artists like Marshmello (who had 10.7 million people attend a virtual concert of his in the game Fortnite), etc.
Collectors put a value on things to collect in this world, based on a variety of objective and subjective factors.
Well, I apologize for my post title. I didn’t really make a case for why I offered $100,000 for the specific Moment I wanted, but I will do that in a Part 2 write-up. I will just say that despite all the other versions of this LeBron “Kobe tribute” dunk, I believe mbl267’s Serial No. 1/1000 (Base Set, Series 1, Common) should be considered the most valuable, above all the Rare (/275) and Legendary (/59) variants. That’s just one man’s subjective opinion though and I’ll explain myself in another write-up.
I did buy the rarest Moment of them all…
Out of all the publicly available Moments that have been released and can be bought/sold, the Moment that I purchased of James Harden (Serial #4) from the From The Top (Series 1) set, is extremely scarce on NBA Top Shot. In fact, along with its’ peer Moments (meaning the same exact Moment from a set with just a different serial number), this Moment is the scarcest of them all. Well, today it is anyway.
…and I also don’t think the majority of the NBA Top Shot community realizes this fact quite yet.
Thank you for reading and sharing
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I have another article: What is the Rarest Moment on NBA Top Shot?