Unless you’ve been living under a rock that doesn’t have internet access, you are probably aware that the market for non-fungible tokens (NFTs) is hotter than discounted GameStop stock on a summer’s day. But as is the case with many individuals of a certain age (or ages), you may be unclear as to why.
Spoiler Alert: we’re in the same boat. So we reached out to Goldin Auctions CEO Ross Hoffman, whose company recently got six figures for a digital highlight of Milwaukee Bucks star forward Giannis Antetokounmpo hitting a layup against the New York Knicks in 2014, for an explanation.
An officially licensed NBA Top Shot moment, the blockchain-backed digital collectible is just a small part of a booming NFT market that has processed more than $250 million in sales from 100,000 buyers over the last month alone, according to The Wall Street Journal.
The first-ever Top Shot moment to be auctioned off by Goldin, the ’14 Antetokounmpo clip sold for $136,530 earlier this month. Below, Hoffman does his best to explain why, how and what the hell we’re even talking about.
InsideHook: Please explain to me why a Top Shot moment should be worth anything at all.
Hoffman: Why would a piece of cardboard [Ed. note: He means a trading a card] be worth anything? People see value in it based on scarcity. It’s simple economics in terms of supply and demand. This moment is No. 1 of 275. It’s from Antetokounmpo‘s rookie year. It’s the only moment from his rookie year. Those are unique identifying aspects of the moment. I think that’s why people are getting excited. Also, you’ve got early adopters and people that run in when there’s a lot of hype on social media with any new platform. There are speculators, investors, diehard fans and people that are two or three of those things.
Come again?
Think about the gaming industry. There are free-to-play games that give players the ability to level up and buy things in the game or pay to change their avatar’s uniform, design, dance moves or things like that. To me, this is a version of that, but there’s currency behind it. There’s tangible value behind it that is not qualitative. It’s quantitative in that it is an open marketplace. It’s uniquely identified and you can sell it. From that perspective, I think it’s really interesting, but it’s tough to get your head around.
Are Top Shot moments and NFTs going to have sustainable value?
We’re a marketplace. We think in the middle of everything. So it’s not our position to speculate. It is our position to experiment and learn. If we were to ignore them and say this is stupid and we don’t like this stuff, that’d be very foolish of me as a CEO. It’s my job to go experimental, to learn to buy on these platforms and to understand how the actual technology works. If our customers are interested in it, there’s going to be demand. My hope is that it continues. I could argue that it’s going to be the biggest thing ever and I could argue that it’s going to go away. Who knows which of those arguments is right? I can see it both ways, but the fact that people are connecting with their passions, to me, means it has staying power.
Do you anticipate selling more Top Shots and other NFTs in the future?
Yeah. I’d expect that. We’re already seeing outreach from folks that have really, really impressive collections of various NFTs outside of just Top Shot. We want to experiment. We’re very interested in learning. We’re very interested in giving our customers what they want and expanding our audience to new segments. We think this does all three. We’re living in the future. I think it’s a foray for people into cryptocurrencies that previously might be intimidated or don’t really understand it.
If you say so …
Look, we’re excited about the space in general. It broadens the market. There’s a lot of people who may not be in the collectible space that can suddenly come in. The reason we wanted to experiment with an NFT on our platform was to learn about it and get closer to the market. I love that the buyer has the ability to do what they want. Similar to a car, they can sell it elsewhere. I could give you some grand-vision answer, but there isn’t one. Again, it’s unique. It’s the first moment of 275 and it’s the only one from his rookie year. And it’s him, a mega-global All-Star. We’ve sold Giannis cards for $1.8 million. We know that there’s a lot of value in a name.
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