Top Shot, the New Crypto Highlight Phenomenon, Explained

Take a stroll around social media and you’ll see no shortage of people talking about “NBA Top Shot,” a collectible, blockchain-based highlight repository that has been around since July of 2019, but caught fire in the last week with over $50M in revenue hauled in by people still trying to get in on the ground floor of the pseudo crypto currency.

The scarcity is what is bringing people in to Top Shot, and the system is going wild. Right now the highest-priced Top Shot available for auction is a block by Zion Williamson against the Nuggets from January, 2020 — with a ludicrous asking price of $250,000.

It’s addictive and exciting for those involved, and to outsiders the dumbest thing in the world. Why are people paying for trading card-esque “packs” of random highlights, which you can watch for free on YouTube, with no material value? Is this the future of sports collectibles, or a massive grift? And will early adopters be millionaires in 10 years, or the new generation of Beanie Baby collectors?

What is NBA Top Shot?

NBA Top Shot in an online-only collection of NBA highlights which can be obtained by buying “packs” or purchased via auction. Think of it like buying sports cards, but in video form. You might crack a pack and get a highlight of a Steph Curry three-pointer, which is only being produced 99 times. When those 99 clips are gone nobody else will ever get that same highlight, and Top Shot claims you’ll own that clip forever.

The clips are created through Blockchain, which is the same technology that powers Bitcoin, Etherium, and other cryptocurrencies. I’ll spare you doing an extremely poor job trying to explain complicated Blockchain technology, which you can read in detail about here, but the important part is that it’s completely encrypted, impossible to hack, and ensures that it’s impossible to duplicate these files. So, for whatever it’s worth, when you buy an NBA Top Shot it is absolutely yours as a collectible.

So, for the price of an entire house, you could instead buy a highlight of Zion blocking a shot, that exists only on the internet, and can only be bought and sold on Top Shot.

Before you say “well, people can ask whatever they want, it doesn’t mean they get it,” understand that Top Shots of Zion Williamson and LeBron James both sold last week on the site for $100,000 each.

So you can make money off NBA Top Shot?

Theoretically yes, but it’s a little more complicated than you might expect. The tech behind Top Shot is a product of Dapper Labs, a Blockchain service that boasts on its own website that it “uses the power of play to deliver blockchain-based experiences that are made for you and ready for the real world.” What this means is that the NBA and a Blockchain service teamed up to replicate the sporting card market in an online medium, replicating scarcity and rarity to turn these moments into a commodity.

by James Dator, SB Nation |  Read more:

Image: Top Shot

[ed. See also: What is Top Shot? (The Irrelevant Investor).]