Open up any news site over the last fortnight and you won't be able to miss mention of the term 'NFT'. It could've been the Kings of Leon announcing their next album will be sold as a NFT; or maybe it was Banksy setting alight artwork that was then sold as a NFT. News outlets championed the cult hit GIF 'Nyan Cat' selling for $500K+ which was eclipsed just recently with the $69 million sale conducted by respected auction house, Christies. Whatever the story, NFTs are in the news.
What exactly is an NFT? Well, NFT stands for non-fungible token which to the lay person doesn't really explain much. Essentially it is a verifiable, unique item that cannot be replaced. In a 'fungible' world, if I gave you a dollar, you could repay me with any dollar. In a 'non-fungible' world you'd have to give me back the exact dollar I gave you.
With the rise of NFT so too are the issues surrounding its adoption. From copyright, environmental impacts, artists' livelihood, buyer identity and motivation the list goes on. There's a lot to unpack which would better suit a 10,000 word long form feature in your favourite weekend paper. For now, consider the following links as an overview on the key issues:
- Forbes provides a decent NFT 101 including origins the potential future
- Decrypt discusses copyright and the frustration for artists
- Amy Castor does a deep dive on buyer identify and motivations behind the recent $69 million NFT purchase
- This Verge article goes into significant detail on the environmental impacts of crypto art
Sport gave NFTs the spotlight
Bitcoin has been on a meteoric rise the past six months, and in the past three months alone, its price has doubled. Its high price most certainly has influenced investors to look for other, more financially approachable digital assets.
NBA Top Shot is an innovative platform that has brought historic moments in NBA history to the blockchain. Resembling somewhat the popular trading cards we see in the physical world, it's been a standout hit. Collectors are cashing in with some portfolios growing to more than $20 million in value in a matter of months. The NBA, with its marketing might and backing of players, teams and owners has brought NFTs mainstream.
Opportunities for sport
There's obvious opportunity for sport in the world of digital assets. Memorable moments are created every game and added to that collecting and trading memorabilia is a key part of sport culture.
NFTs open sport to a world of new items to collect that physical objects like cards, merchandise, framed pictures etc. can’t deliver. The collectable could range from video highlights (as we've seen with NBA Top Shot), 3D visualisations, data and stats, animations, a moment in time.. the opportunity is seemingly endless. It could be as simple as a photo and a logo using NFTs serial numbers as a signal of rarity. As is seen on NBA Top Shot, an item's serial number reflects its value. The first is the most sought after and in turn garners the highest price. Owners of team and league brands have a huge opportunity to create and sell their own ‘official’ collectibles.
As mentioned, collecting sports memorabilia is ingrained in the industry. Using this new technology will help engage with younger audiences. They're familiar with loot boxes and lucky dip packs in video games and sports using this mechanic harks back to older generations opening a pack of cards bought from the local 'milkbar'. It's sports memorabilia for the next generation.
But what opportunities present beyond the professional level? Could NFTs help foster a new era of participation products? Our junior programs could use this technology to reward and incentivise youth in similar ways video games create digital achievements, unlockable content and rewards. The more active a participant is in the program the more NFTs they collect.
There's more to come
In a very short space of time we've seen a number of innovative applications using NFT technology in the sports field. NBA Top Shot is a fantastic example of collectable memorabilia that soon others will follow. Platforms like Axie Infinity showcase the next frontier of NFT - using your collectables to interact in a virtual world. Could this be something we see soon in another premier sport's application of the technology?
What is certain is knowing we're at the forefront of this technology. We watch in interest how major brands and independent artists alike use NFTs and what sport, health and fitness can learn and adapt to create new ways for fans to interact, engage and be part of the brand.