December 5, 2021

Volume XI, Number 339

Advertisement
Advertisement

December 03, 2021

Subscribe to Latest Legal News and Analysis

December 02, 2021

Subscribe to Latest Legal News and Analysis

How NFTs and Blockchain Secure Digital Sports Collectibles

Today, there are new opportunities to own a bit of sports history. It is now possible to even own a digital collectible of your favorite athlete making a play during a game.  NFTs (non-fungible tokens) are being used to provide digital provenance that affords unique ownership of sports most memorable moments.  NFTs rely on blockchain technology to insure that each token is unique and cannot be duplicated or double spent.  At its basic level, an NFT is data stored in a file that is used to transfer information on a blockchain network.  There are currently several different blockchains that support NFTs and the underlying digital collectible could be stored off-chain by including a pointer to the digital collectible (i.e. URL address), or the digital collectible could be stored in-chain, which would take more blockchain data.  Just like a paper certificate of authenticity, an NFT is a way of certifying genuineness and unique ownership of a digital collectible.  In this manner, the NFT adds value to the digital collectible, just as the provenance attached to Babe Ruth’s 1920 Yankees jersey that sold for a record $5.64 million ensures its authenticity and adds to its value.

One prominent example of a digital collectible is a “Moment” sold under the NBA Top Shot platform. Moments include a video clip of the player making a play such as a shot, dunk, steal or block, along with key player stats that are stored in a proprietary file format.  Moments can be purchased in “Packs” directly from NBA Top Shot, and thereafter sold or traded individually, much like traditional basketball or baseball cards. Unlike traditional baseball cards, however, Moments are entirely digital and are stored in software wallets.  NBA Top Shot is officially licensed by the NBA, and its owners are planning to release similar digital collectibles featuring UFC fighters.  MLB has recently partnered with Topps to bring digital collectibles to baseball, and it appears that the NFL is actively pursuing partnerships for football digital collectibles.  It looks like fans of all major sports will soon have the ability to buy, collect, sell, and trade digital collectibles secured by NFTs.

As with any collectible, a digital collectible has a market value of only what the next owner is willing to pay for it.  By having partnerships with the official sporting leagues, competition between competing digital collectible platforms is minimized.  By securing the digital collectible with an NFT, copying and counterfeiting are a very low risk.  Each of these considerations have helped create thriving digital marketplaces where sports fans can now connect with their favorite players outside of the game.  It remains to be seen how the popularity of digital sports collectibles will change with time, but right now the market continues to grow with no peak in sight.

©1994-2021 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XI, Number 144
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Keith P. Carroll Entertainment Attorney Mintz Law Firm Boston
Member

Keith is a nimble and active trial attorney and Co-Chair of the Sports & Entertainment Group. He works with public, private, and closely-held companies, senior executives and boards across many industries. He also regularly advises prominent professional sports franchises, senior executives and athletes with regard to league investigations, business disputes and other sensitive and high-profile matters. Since 2015, he has been trial counsel for nine matters taken to verdict, award, or decision in five different jurisdictions, and in 2020 alone he has successfully...

617-348-4425
Andrew Skale, Mintz Levin Law Firm, San Diego and Los Angeles, Intellectual Property and Litigation Law Attorney
Member

Andrew’s practice is focused on litigation involving patents, trademarks, and copyrights along with handling issues with entertainment law. In addition, Andrew has prosecuted hundreds of patents and trademarks before the US Patent and Trademark Office.

Andrew is frequently sought after for his legal expertise. He has appeared on CNBC’s Squawk Box and has been featured on KCEO radio as a commentator on intellectual property law. He served as an expert witness on trademark law in California state court and has spoken at the University of...

858-314-1506
Justin Leisey Patent Lawyer Mintz
Associate

Justin is a registered patent attorney with a background in chemical engineering. He drafts and prosecutes US and foreign patent applications for clients in a variety of industries, including the life sciences, biotechnology, medtech, pharmaceuticals, energy and sustainability, cleantech, manufacturing, and technology sectors.

Justin regularly conducts patent searches and drafts invalidity/infringement and patentability opinions, assesses risks associated with freedom-to-operate issues, drafts landscape analyses and competitive intelligence...

858.314.1498
Advertisement
Advertisement
Advertisement