November 18, 2018

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Crypto-Collectibles Phenomena Continues as MLB Hopes for Home Run

The Major League Baseball Players Association (MLBPA) signed an exclusive deal with the crypto-collectibles startup, Player Tokens. This is believed to be the first professional athlete-based crypto-collectible offering. The partnership is intended to introduce baseball fans to blockchain technology and blockchain enthusiasts to Major League Baseball (MLB). The tokens will feature 73 All-Stars and players from all 30 MLB teams. Each Player Token has a unique ID that is recorded to the blockchain to prove the authenticity of each asset.

According to a press release:

Player Tokens marks the next step in the evolution of collectibles, leveraging the best of the physical, digital, and crypto worlds. Like physical collectibles, packs can be purchased with a credit card making Player Tokens the first company to offer crypto-collectibles without the need for a crypto wallet or any knowledge about cryptocurrencies. Similar to other crypto-collectibles, fans can prove ownership and authenticity around the finite amount of tokens created. The digital nature of Player Tokens also enables fans to take their tokens with them, allowing for unique experiences in stadiums and access to token-driven games.

In blockchain parlance, these are “non-fungible tokens.” More specifically, a crypto-collectible is a cryptographically unique, non-fungible digital asset. Unlike cryptocurrencies, which require all tokens to be identical, each crypto-collectible token is unique or limited in quantity. Each token can vary in specific attributes and there are limits to the number of tokens that can be generated. Think of these tokens as the digital equivalent of Beanie Babies, but with a twist.

According to the press release: “While the core value of the token is in the artwork that features images of Major League Players, the tokens are multidimensional. Each one also includes an individual history, consisting of its mint date and previous ownership. As more fan experiences are unveiled, the token will continue to memorialize those events.”

This announcement continues the trend of an increasing number of crypto-collectibles. Early pioneers were Spells of Genesis (a blockchain-based trading card game) and Rare Pepe (unique illustrations and photoshops of the character Pepe the Frog). In July 2017, a Homer Simpson-themed Rare Pepe was sold at auction for nearly $39,000. Other notable crypto-collectibles include:

  • celebrity-based collectible tokens such as those offered by Crypto Celebrities;

  • Crypto Kitties, a crypto-collectibles game, where users breed virtual cats that have unique genetic characteristics and a genetic algorithm creates off-spring with unique characteristics (some kitties with rare characteristics have sold for over $100,000); and

  • Decentraland, a virtual reality-based virtual world that runs on the Ethereum blockchain and allows users to visualize and interact with their crypto-collectibles.

Other crypto-collectibles can be found here. Crypto-collectibles are fun and popular, and the market is growing. Various crypto-collectibles marketplaces have emerged such as OpenSea and Rarebits.

Despite the potential upside, companies in this space should be aware of some potential legal issues, as we previously reported in this blog post.

Copyright © 2018, Sheppard Mullin Richter & Hampton LLP.

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About this Author

James Mattinson Blockchain Technology and Digital Currency Lawyer Sheppard Mullin Washington DC
Partner

Jim Gatto is a partner in the Intellectual Property Practice Group in the firm's Washington, D.C. office. He is also Co-Team Leader of the firm's Digital Media Industry and Social Media and Games Industry Teams, Blockchain Technology and Digital Currency team, and Team Leader of the firm's Open Source Team. 

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Mr. Gatto leverages his unique combination of nearly 30 years of IP experience, business insights and attention to technology trends to help companies develop IP and other legal...

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