Student-Athletes and NFTs
This is a quick explainer about NFTs - a trend that you have no doubt seen over the last six months. It's worth Coaches and Administrators taking 2 minutes to understand what NFTs are because of their emerging importance in youth culture, the fact that they are linked to the new digital money known as cryptocurrency, and because NFTs are a Name, Image, and Likeness opportunity for all student-athletes.
What is an NFT?
An NFT is an asset – like sports memorabilia or a piece of artwork – but in a digital instead of a physical from. What makes NFTs so interesting to sports fans is that no two NFTs are identical. NFTs create a market of limited-edition images, videos, and art.
Think about what makes a Honus Wagner American Tobacco Company baseball card so valuable today – scarcity. Only 50 of those Wagner cards exist, which is why one sold last year for $3.25 million. Even when multiple copies of an NFT are created, each is numbered or identified, making it a truly one-of-a-kind collectible.
It’s important to realize that NFTs are not on the fringe of fandom; they have already become part of the mass market. For example, about a year ago, the NBA created NBA Top Shot, their own marketplace of NFTs. USA Today reported that within 6 months, Top Shot had done $500 million in sales with nearly 1 million fan accounts on the site.
Student-Athletes and NFTs
It’s essential that we continue to educate student-athletes that NIL is for everyone and that the opportunities are far more reaching than just traditional product endorsements. As we illustrate the many entrepreneurial ventures that student-athletes are pursuing, we can add NFTs to the mix.
NFTs are perfectly positioned for today’s student-athletes interested in pursuing Name, Image, and Likeness because of two factors. First, student-athletes have immediate access to free or inexpensive resources to create and sell their NFTs – with no special expertise or training required. Sites like OpenSea and Rarible do much of the work. They can literally create NFTs in their dorm rooms today.
Second, every student-athlete has a potential marketplace. The QB for the University of Michigan has 20k Instagram followers and a national audience on Saturday afternoons. While the goalie for the Gettysburg College men’s lacrosse team has 1k Instagram followers and is known in DIII lacrosse community. The size of their marketplaces is different, but both have passionate fan bases (alumni, friends, family, others) willing to support these student-athletes.
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NFTs, NIL, and Financial Literacy
The emergence of NFTs – particularly as student-athletes begin to exercise opportunities in name, image, and likeness - is yet another reason for NIL education and an emphasis on financial literacy.
The ownership of an NFT is tracked on a blockchain. IBM defines blockchain as “a shared ledger that records transactions and tracks assets. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding.” Popular blockchains include Ethereum, Hyperledger Fabric, R3 Corda, and Ripple.
In addition to tracking NFTs, blockchain is the technology that supports cryptocurrency such as Bitcoin. Most NFT marketplaces accept only cryptocurrency as payment, so educating student-athletes about these elements is important.