The Blockchain Revolution in Collectibles: Digital Collectibles to Be Worth $10s of Billions of Dollars in the Coming Years
People have for a long time collected rare items — be they bones, rare works of art, or baseball cards. However, the problem has always arose over how to make sure collectibles are original. Being that there will always be limitations for physical collectibles due to fakes being made, blockchain offers us a unique solution only made possible by its underlying technology. And people are taking notice: crypto-collectibles have been receiving more and more attention as of late.
Currently, collectibles are a $370-billion-dollar market. Even without blockchain technology, digital items and collectibles are collectively a $35-million-dollar market which is growing annually. Even if crypto-collectibles were to capture a small fraction of this entire market, the space could easily be worth $10s of billions of dollars in the coming years.
What Is a Crypto-Collectible?
Simply put, a crypto-collectible is a non-fungible digital piece of information which is cryptographically unique. When it comes to regular crypto-currencies, all of the tokens in circulation are the same. Yet, crypto-collectibles are different in so far as each crypto-collectible is unique and cannot be reproduced. This underlying technology has the potential to revolutionize the entire collectible industry since there is now a way to verify authenticity by blockchain.
Scarcity is what makes a collectible worth its value. Scarcity online was always a difficult problem to wrestle with. If we consider music and photos, these mediums are easily reproducible digitally. With blockchain however, each piece of digital asset can be cryptographically unique which means it cannot be copied and is one-of-a-kind.
How does it work? Well, let’s take the most popular example: CryptoKitties.
CryptoKitties was built on the Ethereum blockchain in late 2017 to wide acclaim and popularity. What made them work as crypto-collectibles was two major attributes:
- Non-fungibility, meaning that each Cryptokitty created would be unique in age, breed, color, and so on. They could not be swapped for one another because they were fundamentally different and thus of different value.
- Because of non-fungibility, CryptoKitties is also indivisible. Unlike Bitcoin, each collectible on the blockchain can only be its whole. So you can only have 1 CryptoKitty and not 1.5 of one. Makes sense.
Like CryptoKitties, all crypto-collectibles have an image associated with each unique digital asset which differentiates it from others. In this case, each kitty is unique in its look and design. Most collectibles on the blockchain today are built as Ethereum tokens known as ERC721 tokens which is a specific code designed for non-fungible digital assets. Many top investors and firms immediately saw the potential of CryptoKitties. In fact, the platform raised $12M from highly-regarded investors and venture capital firms, such as as Naval Ravikan, co-founder of AngelList and CoinList, Mark Pincus, founder of Zynga, and Fred Ehrsam, former founder of Coinbase. The interest from these top investors demonstrates that they know something that many of us don’t: crypto-collectibles are going to be big.
Just consider the potential of this underlying concept. In due time, we could have all collectibles digitally-represented on the blockchain to ensure its authenticity. This would mean that all collectibles, such as rare baseball cards, would have a corresponding digital asset which would be associated with it. On top of this, there are also dozens of apps and companies that issue achievement badges and the like, such as Xbox Live and Duolingo, all of which can be represented uniquely as a crypto-collectible.
Crypto-collectibles are just one part of a larger trend which is seeing physical assets moving to digital representation. Blockchain offers us the best solution to ensure the authenticity of these assets.
What Are the Up-and-Coming Crypto-Collectibles on the Market?
We already mentioned CryptoKitties, which spurred the whole trend, but let’s take a look at some other projects currently working on crypto-collectibles.
Rare Bits aims to become something like the Ebay of crypto-collectibles on the blockchain. It is through their marketplace that you can share any crypto-collectible you have for Ethereum. As an added bonus, there’s absolutely no fees other than Ethereum’s standard gas fee.
Rarebits boasts a few impressive features:
- Under “Product Hunt,” you can see all the new crypto-collectibles being added every day as well as the current trending ones.
- A visualized wallet of all of your collectibles.
- Raised $6 million from venture capital firms and is currently in beta launch.
- Rarebits markets themselves as “Ebay, but free” for all things crypto-collectibles.
Being the fist of its kind, Rare Bits offers us a unique idea that will continue to grow as the Ethereum blockchain ecosystem expands. It’s definitely a project you should keep your eyes on.
CryptoAnime is a cute idea which seeks to bring Japanese anime creators to the blockchain. The use is simple and easy to understand:
- Digital art is uploaded to the Ethereum blockchain.
- Each piece of digital art uploaded is 100% unique and recognized by its creator as such.
- Buy the artwork and see your collection grow — and HODL it so it increases in value or keep it just for yourself.
CryptoAnime has been featured in Tech in Asia, ABC 7 News, and Yahoo Finance. The platform was just launched this past April 2018 and they are currently improving their social functionality.
In the future, CryptoAnime hopes to stream series directly on their platform and have crypto-collectibles offered as bonuses.
Decentraland is an ambitious project that takes crypto-collectibles to the extreme. They’re allowing users to make their own decentralized virtual reality universe on the blockchain. By designing unique in-game worlds, Decentraland will make heavy use of non-fungible tokens by selling virtual land.
The goal for Decentraland is to create a complete 360-degree, virtual world on the blockchain. In this world, your experiences would be endless, and what you can do with your virtual land is also equally endless.
- A public virtual world free from any centralized body.
- Users have full control of their content and land as well as keeping all proceeds from said content.
- Utilizing blockchain technology, a world can be created which is unique in how it conceives of property and ownership: the first of its kind.
Decentraland is a utopian vision which is well-off in the future in terms of release. Yet, it demonstrates the potential of crypto-collectibles when stretched to their limits.
Gamedex is an up-and-coming project for crypto-collectibles, specifically fantasy creatures, digital pets, and sports cards. Although they have yet to conduct their pre-sale, the project has high hopes for itself. Not only does it seek to create true scarcity and a trustless system of ownership for collectibles, but it also seeks to make this entire platform as accessible as possible.
- Gamedex would serve as your digital wallet, store, and exchange all in one.
- Will include both desktop and smartphone clients.
- All collectibles will be assets traded against their token, the GDX token.
- Their platform will first support popular digital collectibles such as Pokémon, Magic: The Gathering, FIFA Ultimate, and others.
- Not only will Gamedex’s exchange allow for credit-card payments, but they plan to allow GDX tokens to be purchased in-store. All one needs to do is buy a card which reveals your code and amount of GDX tokens purchased.
- Peer-to-peer trading is ensured by making sure both parties agree before anything is sent.
Much of the team at Gamedex has experience at other companies including Facebook, Microsoft, Twitch, Sony, and others. They therefore have the necessary background to make Gamedex viable and to integrate it into the existing digital infrastructure, especially gaming and streaming. It’s smart that Gamedex decided to focus on the gaming sector where arguably digital collectibles will have the most popularity.
The potential for crypto-collectibles is significant enough to merit attention from anyone in the cryptocurrency space. So ignore at your own peril — because when crypto-collectibles catch on, they will no doubt be a popular sector of the emerging cryptocurrency space.