For many years, collectible trading cards and stickers were all the talk of school yards around the world. Young people would be trying to fill up their Panini sticker book with the relevant football players, for example, heading into school with hundreds of spares of ones that they’d already got, happily trading with others in order to complete their album. In the United States of America, similar things would happen with cards of baseball players, with people collecting rare ones and giving away the more common ones in exchange for others to bulk out they collection.
In the modern era, something similar is happening thanks to the explosion of NFT trading cards, with those that trust the world of blockchain technology looking to add as many of them to their collection as they can. In essence, an NFT trading card is simply a digital version of the sort of cards and stickers that many of us used to collect as kids, being collected and traded just as those stickers and cards were. The big difference, of course, is the fact that it is all done online, with physical cards not existing to add a degree of mystery and confusion to the entire enterprise.
What Are They?
First things first, then, and an explanation of what, exactly, NFT trading cards actually are. We should start by explaining the acronym ‘NFT’, which stands for ‘Non-Fungible Token’. ‘Non-fungible’ means that something is unique and cannot be replaced with something else. Physical money is fungible, meaning that you could trade it or exchange it for something else. NFTs, meanwhile, feature a digital signature that makes each of them unique. Whilst you’re able to trade them, they would then become the property of someone else who would then own their digital signature.
There are similarities between NFTs and cryptocurrency, insomuch as they are confirmed by being on the blockchain, but there are also differences. Bitcoin, as an example, is fungible because one Bitcoin has the same value as another Bitcoin. NFTs do not have the same value as each other, with the value of each NFT being determined by the market. In other words, one NFT doesn’t equal another NFT, which is why they are non-fungible. They allow their creators to tokenise the likes of art or another collectible, having its own unique value as a result.
An NFT trading card is pretty much exactly what it sounds like, using blockchain technology in order to secure and transfer ownership of a digital collectible. Each NFT is distinct, offering proof of its ownership in order to offer value and collectability in a way that makes them similar to trading cards that you’d find in the real world. Cards can be made up of a number different things, including audio recordings, videos and images. The value of each card can vary significantly for all sorts of reasons, including their historical relevance and the uniqueness of the card in question.
The Blockchain Explained
Having mentioned the blockchain, it feels important at this point to explain what it is. A blockchain is simply a ledger that has a growing list of records that can be securely linked together thanks to cryptographic hashes. Each block contains the cryptographic hash of the previous block as well as a timestamp and information about the transaction. The fact that each of the block has some information about the previous block is what allows them to form a chain, with any transactions noted on the blockchain being irreversible as data cannot be altered retroactively.
The blockchain is crucial to the sale and transfer of NFTs, owing to the fact that any transfer of ownership of such a digital item is logged on the blockchain so the new owner is known. Blockchains are used to keep track of payments with cryptocurrency, for example, in order to stop them from being used to pay for something twice. Most blockchains are decentralised, distributed and usually public, allowing participants to verify any transactions independently and relatively inexpensively, which is what makes cryptocurrency so appealing to many people.
How Do They Work?
In the real world, trading cards usually have several of the same type produced. When it comes to NFT trading cards, however, each one is unique and boasts its own digital signature. Each one-of-a-kind token will have had its ownership and authenticity guaranteed, adding to their appeal in much the same way that a rare trading card will have done in the past. Cards are able to showcase the likes of an artist’s work in its purest form, as well have interactive features that help to set them apart from others. The blockchain means that they can’t be replicated too.
Just as is the case with real-life trading cards, the exact value of an NFT trading card will be dictated by the market. The likes of their rarity, the historical significance of the card in question and the popularity of its creator or the franchise to which the card is linked will all help to dictate how much the NFT trading card is worth. As with real-life trading cards, the value of an NFT trading card can soar of plummet depending on the market. There are new collections and NFT trading cards being released all of the time, which will alter how the existing ones are seen by the market.
What Is the Point of Them?
It would not be unreasonable to ask what the point of NFT trading cards actually is. Of course, the question could just as easily be asked of real-life trading cards or stickers that many of us will have collected in the past. People will use them for any number of different things, with some choosing to get hold of NFT trading cards in order to collect them. Others will have a collection of NFT trading cards that they have on display, allowing others to look at them just as you might allow people to come and look at your art collection if you happened to have one in your home.
There is no doubt that NFT trading cards are used as an investment by some people. There will be plenty who hope to use their NFT trading cards as an investment, buying and selling them depending on where their market value is at the time. Many will buy cards when they can afford to, hoping that their value will increase and that they will be able to sell them on to someone else further down the line. That profit can then be re-invested into another NFT trading card that will be held onto in the hope that it becomes worth something, at which point it will be sold too and the cycle continues.
Some NFT trading cards do have a physical utility, which can manifest itself in numerous ways. There can be in-game usage, for example, in which a layer of functionality can be added to an NFT trading card by giving them a use that works during an associated game and adds another reason to buy one. There are other NFT trading cards that will have a purpose such as membership access to something. This gives them a point beyond just the collectible nature of them, adding to their value and meaning that companies are more likely to want to be involved with them.
How Rarity Works
We have mentioned the importance of rarity when it comes to NFT trading cards a couple of times, but what do we mean by that any how does it work? One of the biggest factors in terms of an NFT trading card’s value is its rarity. When a card is part of a limited edition series, for example, it is considered to be rare and there will be a desire of many to collect it. This, as with something collectible in real life, can see its value soar as people try to get hold of its, often out-bidding one another in an attempt to get it into their own collection at the expense of someone else.
To put it another way, the rarity and scarcity of an NFT trading card will increase its perceived desirability. The more exclusive something is, the more likely it is to go up in value. Obviously that isn’t necessarily the case with something that you’ve just made on your computer and called a one-of-a-kind, but it can be how something designed by someone famous or linked to a well-known franchise might be. If the NFL created an official card celebrating 100 years of its existence, for example, and only made one of them, that one card would have huge value for those that love the NFL and were collecting the organisations’ NFT trading cards.
How to Buy & Trade Them
If buying and trading NFT trading cards is something that appeals to you, you might want to look out for the numerous marketplaces where you can do exactly that. There are numerous ones around, with each of them offering something different and focussing on a specific aspect of the NFT world. Some of them allow you to make NFTs of your own, for example, whilst others are aimed squarely at being a marketplace for the buying and selling of such trading cards and will be about specific themes rather than being all-encompassing. Here is a look at some example marketplaces:
OpenSea
If you’re looking for the largest NFT trading card marketplace in terms of sheer volume, you’d do a lot worse than heading to OpenSea. It is known for the large variety of things that it has on offer, with multiple categories at play. It allows for the buying and selling of NFT trading cards as well as other digital assets, so if it is something that you find yourself getting into then you’d do well to be involved with OpenSea. Whether it be game items, domain names or even music, OpenSea will have you buying and trading in no time, provided you’re able to do so with cryptocurrencies.
NBA TopShot
If you want an example of a world in which NFT trading cards have taken off thanks to a tie-in with an official organisation then you’d be hard-pushed to find a better one than NBA TopShot. There is an argument that this is the leading NFT marketplace in sport, with the NFT trading cards on offer being officially licensed by the National Basketball Association. You can not only collect still images of players, you can also get hold of licensed highlight clips from specific moments that have taken place in the world of NBA over the years, with each one being unique.
Things to Look Out For
As you can imagine, the world of NFT trading cards is just as liable to be exploited as anything else. There are certain things that you can look out for in order to protect yourself as well as possible, including illegitimate trading cards. If you make sure that you are purchasing from a legitimate marketplace then you should limit the chance of this happening, with the key thing being the need to look out for verification marks of sellers. If you’re wanting to buy, sell or trade an NFT trading card then you’d do well to go directly to the marketplace, rather than following a link from an email or a forum.
The best thing that you can do is plenty of research before taking the plunge. If something sounds too good to be true then there is a real possibility that it will be. More than a few NFT promoters have been known to draw people in by promising wealth in the future, only for them to then stop trading and disappear altogether. Do your best to make sure that the company or people that you’re dealing with is genuine and has a good track record of trading before you turned up to buy what they’re offering.
