More and more internet users are looking for an answer to the question: what are NFTs? The NFT craze really started with headlines that digital art sales made in early 2021. In March 2021, Christie’s sold an NFT that was created by the artist Beeple for around $69 million. It was not a famous painting rather than “just” a digital work of art.
Much like bitcoin has been referred to as digital money for many years, in opposition to traditional currencies, NFTs are now considered a digital form of art. Beyond that, however, NFTs have much greater potential in many areas. One very good example are digital trading cards featuring baseball or football players on Sorare.
The basics – what are NFTs?
NFT is the abbreviation of the term ‘Non-fungible token’. That sounds a bit more complicated than it is. It only requires a relatively simple explanation.
A fungible asset is something that can be divided into different units and exchanged at any time. Money is the perfect example. A 20-dollar bill can be exchanged for two 10-dollar bills or 20 dollar coins. The value remains the same.
Any item that is not fungible is not as easy to trade or exchange. Paintings or even houses have very unique characteristics. While these can be evaluated financially, the price ultimately depends on whether at least one buyer accepts the evaluation. It is relatively easy to find an alternative to a suburban house. It is much more complicated to find an alternative for a luxury seafront villa with a unique view – therefore it is difficult to determine an exact value. With works of art that only exist once, it is often even more complicated.
NFTs transfer the principle of unique or rare items to the digital world. Any token is typically just a certificate of ownership for an item. Today, this is usually a digital item, but in theory it can also be used to certify the ownership of physical goods.
How do NFTs work?
Art provides a very good example. Many works of art are particularly valuable because they are unique. A painting such as the Mona Lisa is therefore not easy to sell. Digital files, on the other hand, can easily be copied without any loss of quality.
NFTs ensure that digital art is “tokenized”. With an NFT, the buyer receives a digital certificate of ownership. The certificate can be sold at any time – marketplaces for NFTs are now very popular. They are even offered on crypto exchanges such as Coinbase or Binance.
Just like with traditional cryptocurrencies, all transactions are stored in a blockchain. That means that you can always see who owns an NFT. Such records are also tamper-proof.
Is digital art easy to copy?
In theory, copying any digital item is not a problem. Many people have already seen digital works of art or have even saved them as a file on their computer. Files can also be shared with friends or even on social networks.
However, buying an NFT means that you will receive a token and thus have proof of ownership. Compare that to a painting which is widely distributed as prints or photos; most people have seen the Mona Lisa even without visiting the Louvre in Paris. However, the original Mona Lisa only exists once – and it may or may not be made accessible to museum visitors.
Negative headlines
Unfortunately, negative headlines about NFTs are pretty frequent. That has various reasons. On the one hand, many scammers want to profit from the NFT boom and simply steal money from inexperienced users. On the other hand, the technology itself is not yet mature, sometimes leading to technical problems which are partly caused by a lack of standards. In addition, commentators often refer to the high energy consumption of blockchains. This particular point is already almost irrelevant, yet you need a bit of technical expertise to understand the background.
Overall, it should be good practice for users to be careful with new projects – rather than get greedy. There is no doubt that NFTs have huge potential, not just for graphic designers, authors or musicians. Whether a project is really based on solid principles can often be found out with detailed research. This includes, for example, a look at the platform where an NFT is sold.
Why are NFTs interesting for sports fans?
Many sports fans today are wondering: What are NFTs? On Sorare, the technology is used to ensure that traditional trading cards become digital, creating the basis for an innovative concept. There is only a limited number of baseball cards – or trading cards for other sports – available on Sorare. As a result, these cards have a certain value, which can increase or decrease over time, depending on the performance of the player. In addition, these cards have utility on Sorare because you can use them for fantasy leagues and win more cards if you enter the best combination of players.
There are some other projects where sports fans can also collect and trade special tokens. The NBA has been a pioneer in this area. NBA Top Shot had a turnover of several million dollars per month shortly after its launch.
Potential for all types of sports
In addition to the question “What are NFTs” there is also the question of whether the trend will continue. So far, this has been a bit of a niche market and revenues are hardly comparable with traditional broadcast deals. However, current growth rates show the enormous potential.
There’s also another aspect which speaks for the chances of NFTs in the sports sector. An increasing number of fans is eager to experience sport in a different form, compared to just a few years ago. Younger fans in particular are no longer as interested in entire games as they used to be. Video clips on social media as well as statistics are playing an increasingly important role. It is a trend that can be experienced across virtually all sports. As a result, leagues and teams need to find new ways to interact with fans.
Summary
The question “What are NFTs” is not only important for art lovers, but also for sports fans. Platforms where users can buy and trade NFTs have a huge potential market ahead of them. It is therefore not surprising that more and more teams and leagues worldwide collaborate with companies like Sorare.
On the pages listed below, you can find answers to many frequently asked questions about Sorare: MLB