• Justin Halvorson

The Next Bitcoin?

This week on the SJ Podcast we covered NFT's, it was a great conversation and it sparked me to do some more digging on the subject.

The rapid increase in adoption of cryptocurrencies has given rise to another popular digital investment, non-fungible tokens (NFTs). NFT’s are digital tokens used to represent assets, like other crypto’s.

NFT’s are indivisible, which is unlike other cryptocurrencies or shares of a stock. This means the owner of a NFT owns the entire asset, or none of the asset. They are bought and sold on a blockchain, meaning an investor can verify ownership and see how much each person has paid for the asset overtime.

Pieces of art, sports cards and even digital real estate are available as NFT’s.

One well known NFT-based artist named Beeple (Mike Winkelmann), recently sold his collection of 20 digital based pieces of art for $3.5M. He has a following of nearly 2 million on Instagram and has created images for brands such as Louis Vuitton, Nike and Apple.

Another popular NFT is NBA Top Shot, digital sports cards that capture people’s favorite moments in professional basketball. Essentially officially licensed NBA GIFs, Top Shot Moments can be purchased individually in the marketplace or in packs, which are only released periodically and sell out quickly.

The genius of this NFT is using scarcity when releasing their moments, only releasing new moments in limited packs. Top Shot has posted over $200M sales to date.

Recently a short video of LeBron James sold on the Top Shot platform in less than one minute for $208,000. Top Shot has an estimated the current market value of $1.8B.

With the rise of NFT’s and blockchain investing, well known venture capitalists such as Mark Cuban and Chamath Palihapitiya have started to speak publicly about their optimism on the asset class.

Cuban claimed in a recent blog post that his time selling stamps as a youth have made him bullish on digital assets. “This generation knows that a smart contract and the digital good it reflects or a

CryptoAsset are a better investment than old school see, touch or feel uses,” Cuban wrote. “It took me collecting stamps and baseball cards to truly understand why this is true.”

Cuban practices what he preaches. He auctions digital goods online, including a video experience for Dallas Mavericks fans called the “Mavs Suns Game Day Experience.” Cuban, like many others, believes smart contracts, blockchain, and NFT’s will be the future of business.