SALT LAKE CITY (ABC4) – As if the new world of cryptocurrency and blockchain wasn’t vast enough, a new component has been added to the virtual world. NFTs, or non-fungible tokens, have been taking the Internet by storm, becoming especially hot in the last few weeks.
Some of these NFTs, which are basically digital collectibles or creations, have sold in the millions of dollars.
These digital collectibles, which can be stored on a digital wallet, can range from a virtual “skin” that a Fortnite player can put on his video game character, to a graphic design made by an artist, big or small.
To put it simply, there is a booming, billion-dollar market for digital images and files, which cannot be held, touched, or felt in any way. It’s an unimaginable reality for many people to comprehend.
SLC NFT creator becomes an industry leader
Chris Le of Salt Lake City saw this trend coming and has already made his mark on the booming business. His company, RTFKT Studios, sold 600 NFTs of a sneaker they designed and released at the end of April. The NFTs sold out in 7 minutes, reaching total revenue of $3.1 million in about the same time it takes to properly reheat a frozen dinner in a microwave.
Owning one of RTFKT’s sneaker NFTs will allow the holder, which can be verified on the blockchain, a complex decentralized platform that provides the framework for cryptocurrencies like Bitcoin, to access an actual pair of shoes during a “forge event.” While the rights to exclusive, collectible shoes might be cool, the appeal is really in owning the digital product or NFT, which shows the owner history or exclusivity of the product. RTFKT is making the conversion of NFTs into physical goods a focus, but for a lot of NFT sales, the digital product is the only actual product received by the buyer. These can be saved and sold later, or put in a specially-coded NFT frame.
Le explains to ABC4 why NFTs are so popular, using traditional collectibles as a metaphor.
“Like a physical Michael Jordan jersey, you would have to go and get authenticated with an actual person who authenticates collectible goods. Then he would have to verify that Michael Jordan really signed this, all kinds of information that you need to verify the jersey. But with an NFT that’s not the case because, if Michael Jordan created the NFT or the jersey on a blockchain, the entity will always show that it came from Michael Jordan, no matter where you sell it,” Le explains.
NFTs get their value from the ownership or source of the “drop,” or release, and from the scarcity of the product. For example, popular internet personality Logan Paul dropped a 1-of-1 NFT of a video clip he made of himself opening a box of Pokemon cards that sold for $20,000. The value hinges on the fact that there is only one NFT that can be traced with the blockchain data showing it’s an authentic Logan Paul NFT. A copy of the video clip won’t have that data and thus has no value. Of course, Paul, or whoever drops a limited digital product, can always flood the market with more NFTs, but that could also happen with any limited edition collectible. There is a lot of trust combined with computer science in the process of buying and selling NFTs, Le explains.
Speaking of Logan Paul, RTFKT is set to reveal a major collaboration with his brother, Jake, for his pay-per-view boxing match against Ben Askren on Saturday night.
While Michael Jordan has yet to drop an NFT, other celebrities have gotten into the digital product space. RTKFT recently worked on a space-themed NFT collaboration with Paris Hilton. The company also recently announced a collaboration with popular streetwear designer Jeff Staple as well. Le says major brands like Nike have also reached out to probe interest in working together on an NFT drop.
NBA Top Shot starts the sports NFT trend
The trend is spreading to sports as well. The National Basketball Association launched an NFT marketplace a few months ago called NBA Top Shot, where fans can buy and sell digital versions of basketball cards called “moments.” Physical NBA cards are experiencing a resurgence as well, with some cards going for big money. On NBA Top Shot, the digital cards are also quite valuable, which can be shocking for something that is not tangible or physical. For example, a hologram edition of a Donovan Mitchell block on LeBron James in a Jazz-Lakers game from 2019 is currently listed for $25,000.
Le admits that the local NFT scene in Utah is still in its infancy. While he works either from a studio space in downtown Salt Lake City or at his home, the fellow co-founders of his company live abroad. One lives in Paris and the other is in Mexico, waiting for his visa into the United States. They’re able to communicate and operate their rapidly-growing business using Zoom calls and other messaging platforms. Although Le isn’t aware of many others capitalizing on NFT creation and selling in the Beehive State, he has seen a few people trying to score on the digital basketball card market.
Nate Hickerson is one of those basketball fans who has been turned on to the world of NFTs through NBA Top Shot. He was introduced to the digital marketplace by a friend when it was first gathering momentum in the press and media. Now he’s hooked and logs on every day to check his account valuation.
“I like Jazz moments,” Hickerson tells ABC4. “I’ve got a Donovan [Mitchell], a [Rudy] Gobert, a [Mike] Conley, so you gotta represent the hometown team.”
Hickerson also says he’s invested in a couple of digital cards featuring Denver Nuggets center Nikola Jokic, with the hope that the value can increase if he wins the NBA MVP award this season.
NFTs could be Gen-Z’s version of Pokemon cards
To Le, who is just 32-years-old, the future is unlimited for NFTs. Growing up having collected Pokémon cards as a kid, he sees NFTs as the next wave of collectibles for future generations.
“They’re collecting digital goods playing Minecraft, Roblox, Fortnite, all that,” Le explains. “Those are virtual items so it’s inevitable that they’re going to be collecting NFTs in the future.”