What do you call too many rare things? Something that’s not rare at all.
Like many boys who grew up in the 80s and 90s, I collected baseball cards. My brother and I would pool our allowance and head to the Magik Market convenience store, where you could pick up a pack of cards (complete with a stale stick of gum) for 35 cents. Sometimes we’d get enough money together and convince our parents to take us to Sam’s Club so we could buy a whole box.
I collected for two reasons. First, it was fun. We’d trade cards with other neighborhood kids to collect our favorite players and try to complete the 792-card set. Second, there was money in it. Popular cards like the 1985 Topps Mark McGwire and 1989 Upper Deck Ken Griffey Jr. could turn a cheap pack of cards into big money for a young kid.
We hoped that if we held onto these cards until our kids were born, as kids did in the prior generation, we’d be holding onto the equivalent of a valuable 1952 Topps Mickey Mantle.
We didn’t think much about the actual supply of cards. The Mantle card was valuable, in part, because it was so rare. There weren’t that many cards printed to begin with. And most kids who owned a ’52 Mantle didn’t take good care of it. Maybe they stuck it on their bicycle spokes. Or their parents threw out their collection when they went to college.
We didn’t realize that the baseball card companies were running their printing presses faster than Zimbabwe’s currency office. And kids didn’t throw cards away anymore because they hoped the cards would be valuable one day.
For the most part, kids of the 80s and 90s were disappointed when seeing how much their collections were worth a generation later.
If baseball cards of my generation weren’t scarce and thus valuable, how could card companies introduce that sort of thrill of pulling open a pack with an instant payday? They had to manufacture scarcity.
One way to do this was through card grading. Third-party certifiers would grade the card for quality, with only the best being deemed worthy of being “Gem Mint.” My first e-commerce business took advantage of this; in the early 2000s, I bought boxes of old unopened baseball card packs on eBay and sold the packs individually on my site. The idea was that buyers could hit paydirt if they scored a rookie card of an 80s star that graded Gem Mint.
This was great for the card graders but didn’t do much for the card companies trying to sell brand new packs. So they manufactured scarcity with so-called insert cards. Some cards had autographs. Others had pieces of game-used material. Others were merely numbered. What they had in common is that each insert had a limited print run.
Card manufacturers printed odds on the packaging. Opening a pack of cards had turned into something akin to buying a lottery ticket.
But what happens when all of the manufacturers put out a bunch of rare numbered cards? They are no longer rare.
The price of many game-used relic cards dropped by 90% or more once the market was flooded. Things got so out of control with many different sets and versions of sets released each year that Major League Baseball signed an exclusive deal with Topps in 2009, drastically reducing the number of options (for a while, at least).
The takeaway is that the way you make something that’s brand new a scarce collectible is to deliberately make it scarce, but this deliberate scarcity is a mirage.
This brings us to 2021. Last weekend I bought a pack of three virtual basketball cards at NBA Top Shot for $14. Each of these cards (or “moments”) is numbered, and some are rarer than others. I turned around and sold one of the cards for $189 the same day.
On Sunday, Top Shot launched a new offering of packs for $199. It limited the offering to about 35,000 packs, so not everyone who wanted one got one. Rarity was part of the pitch:
This rare drop comes packing an extra surprise, as collectors will additionally find one Seeing Stars Moment within each pack as well. Yes, every single Rising Stars pack will come with a rare Rising Stars Moment limited to 2,021 and a common Seeing Stars Moment limited to 10,000.
Back of the envelope, these new packs generated about $7 million in revenue within an hour. This means you can expect lots of cards to be minted that are limited to 2,021, 10,000, or whatever.
This means that a card numbered out of 2,021 isn’t all that rare. Sure, there are 2,021 of that card, but there are lots of alternative “rare” cards people can buy. Manufactured scarcity is eventually dwarfed by manufacturing, e.g., printing more cards.
Some of the hoopla around Top Shot is that it’s also a non-fungible token (NFT). People love their crypto, so this is an opportunity to get in on something like bitcoin. And, to be sure, people who got in early have made a lot of money in terms of value in their accounts. I know at least one domainer who has made enough from Top Shot to pay for college for one of his kids. Stories about collections worth millions are making the rounds.
I think we all know where this ends up, though. It will go the way of Beanie Babies.
That’s not to say that you can’t make money with it in the short term. By all means, I’ll continue to buy packs of NBA Top Shot when I can, as long as I can turn around and sell the cards for more than the pack cost.
For my money, acquiring .com domains is still my favorite collectible. Only one of any .com will ever be minted. Sure, a second level domain can be created in another extension, but it’s just not the same. A rare .com has a valuable use, too.
That said, tearing open a pack of sports cards is always a joy, whether it’s ripping open a physical pack or clicking on a virtual one.
How about throwing a Mickey Mantle card to a wall. The one who had the closest card to the wall would win all the cards thrown by friends. If course, I didn’t know better in the 50s when I was 6 or 7 years old.
When you wrote about “Zimbabwe Currency office”, you probably meant Biden Currency Office. You can’t say it now that you live in the Northwest! LOL
From on old neighbor in Texas!
Trump printed far more than Obama did.
This is what I’ve been doing for the last year. Buying and selling NFT cards/game items. Blockchain gaming is the future, and it’s still a tiny niche. Your gaming items are 100% your own to buy/sell trade. Such NFT are even interloopable, whereas they may be implemented across games. All this leads to real money tournaments and the such. Playing cards are smashing records, one sold for $60k, a single card.
There’s digital art too, which I don’t get into, but here, $60m bid for a single digital art at Christies auction: https://www.zerohedge.com/crypto/holy-fk-beeple-reacts-record-breaking-69-million-bid-nft-artwork
I wrote this on online domain, there are a few games by serious developers building the NFT blockchain games. If you like games or investing in this kind of thing you should check them out. It’s the future of gaming for sure! Only about 50k ppl play these games in total! Still lots of time to learn/invest.
I think this article nicely sums up the scam of cryptos or digital assets – manufactured hyped scarcity. Same for anything else they deliberately and unnecessarily make digital. Why would I want a digital card/cash/gold/etc when I can have a real physical one?
Conventional fiat currency – fix the token value, but expand the supply of tokens to infinity.
Crypto currency – fix the supply of tokens to an arbitrary value, but expand the value of the tokens and their divisibility to infinity.
They are both quantative easing (QE), or printing currency for nothing. Wasted energy is not real useful work. The added “bonus” (sarcasm) with crytpto is that it is cashless – your currency can be tracked/taxed/frozen/stolen at will.
And please, don’t tell me about encryption security etc – I know about “How to make a mint: The cryptography of anonymous electronic cash” written by the NSA in 1996, well before Mr Satoshi Nakafraudster wrote his alleged paper in 2008. The NSA conceived this junk along with the hackable encryption methods.
Many things come to mind…. I am an avid card collector so I was aware of these offerings many weeks ago.
Firstly, easy come, easy go.
Secondly, see first thought.
Don’t get me wrong, people will make money based on others stupidity and the ones who know its stupid will lie to your face to make it, if they can exit.
Maybe I am wrong maybe this is the new version of cards and if that’s the case than this generation needs help.
I highly suggest you read the TOS before getting involved.
Andrew Allemann says
Yeah, major backlog there. And they don’t really need to do this as an NFT. All it needs is a company database of who owns what. eTopps was an early version of what Top Shot really is.
Lenny Jingowicz says
Anyone know a way to short sell this junk?
Shorting an NFT is more complicated than regular crypto because NFT aren’t exactly as liquid. There aren’t exchanges up with order books for NFT.
Basically, ‘short’ can be manipulated super easy. Still yes, you can short some things. PPL pool the assets as collateral to back short positions (obviously).
So I can’t really recommended it yet because relatively illiquidity of NFT by nature (each one being unique sometimes). If you look hard you could probably find short indexes yes. What you want is to search a term: “NFTfi”
Again, to say it will be easy is an understatement.
I wouldn’t recommended this shorting. Some of the stuff is silly. One recent example, just 4 days ago an old ETH contract with one of the first pixel arts ever, ‘mooncats’ was discovered. It was posted on twitter and anyone that paid eth TX fee (like $40) could get one of the long lost mooncats. The mooncats sold for up to $40k each 2 days later. Imagine shorting something that goes from $40 to 40k in 2 days.
You can do A LOT more with digital cards than physical ones. The markets are more liquid and it’s easier to build things, ‘games’ and gambling around them.
The foundation behind all this is just blockchain you know, you own the asset. Companies spending a lot of $ to build platforms to use various NFT in wild and interesting ways. Since no one owns the asset, anyone can build such a platform, and many are popping up.
Say for NBA topshop cards. They don’t do much now. But someday anyone can make some sort of fantasy sports team based on the cards they own, the more single player cards they own the more leveraged their gamble can be etc.
My points of view come from an outlook. Generally hard times coming. Physcial labor not so necessary. People keen on smaller, easier living, no mcmasion. They are valuing other things instead. It is a lot of gaming and ‘gambling’ in the future. And I don’t mean lottery tickets and slot machines.