KANSAS CITY, Mo. — For decades, shops like The Baseball Card Store in Overland Park, Kansas have been a hub for local sports fanatics, but the newest sports collectible isn’t something you’ll find on a shelf.
Non-fungible tokens, commonly referred to as NFTs, are digital art works that can set you back thousands and can only be bought with cryptocurrency, a form of digital currency where value can fluctuate wildly.
In 2021, someone forked out $246,000 worth of cryptocurrency for a Patrick Mahomes NFT titled, “Mahomes Magic,” purchased on MakersPlace.com, the exclusive website for Mahomes’ personal NFT collection.
Though some NFTs, like “Mahomes Magic,” are legitimate, Yoav Keren, CEO of Brandshield, which helps companies combat fraud and forgery, said the NFT world is full of scammers and content creators infringing upon the likeness of public figures, specifically on platforms that are not regulated by an established organization, like the NFL or NBA.
“But if you do decide to buy a NFT, do your research and make sure you are buying from an official entity,” Keren said.
The NFL’s official NFT platform is NFL All Day and the NBA’s is NBA Top Shot.
Scrimmaging with scammers
Cryptocurrency fluctuates so much that some creators of the NFT company Bored Ape Yacht Club (BAYC) are being sued for allowing sports stars, such as tennis legend Serena Williams and Golden State Warriors star Stephen Curry, to promote NFTs whose values fell dramatically after hefty purchases.
The complaint filed in December alleges celebrity endorsements artificially increased the interest and value of the BAYC NFTs and Yuga Labs’ Apecoin crypto tokens, resulting in a “staggering” loss for buyers.
With the spike in NFT interest, enter scammers who aim to profit off the likeness of celebrities without their consent, Keren said.
“Specifically, in the sports industry and Kansas City NFL, Patrick Mahomes is an example of impersonations to sport themes,” he said.
Anthony Felicetti, a longtime crypto-enthusiast who buys and trades NFTs, said he is confident in his purchases because he only interacts with sellers that maintain a substantial blockchain.
A blockchain is a decentralized, digitally distributed, public ledger used to record transactions across a network. The record cannot be altered retroactively without the consensus of the network.
“So, I could go search and follow this person and I could look at literally all the activity they’ve ever done,” he said.
Blockchains allow NFT consumers to verify if a person is truly sending the buyer their NFT upon purchase. It also discloses how much someone purchased the NFT for, as well as the date the transaction was completed.
But when it comes to NFTs depicting celebrities and athletes, Felicetti said he doesn’t bother purchasing unless he is certain it came from a regulated marketplace, such as DraftKings, regulated by the Alcohol and Gaming Commission of Ontario.
“So, somebody just says, ‘Oh, I’m starting up this thing, it’s Patrick Mahomes,’ I wouldn’t do it,” he said. “I need to know where it’s coming from.”
Fumbling for decentralization
Jordan Neal, employee at The Baseball Card Store, said he is doubtful about the long-term success of the NFT market.
“A regular person can just walk in here and buy a pack of sports cards and enjoy it but if they want to buy a digital art or NFT, they have to sign up with a bank account and transfer money and stuff like that,” Jordan Neal, employee at The Baseball Card Store, said. “It’s just prohibitive.”
Julian Zugazagoitia, CEO of the Nelson Atkins Museum of Art, said he’s keeping an open mind, though he’s not ready to buy a piece yet.
He said in some ways, the digital art market is similar to other once-considered-new forms of art.
“But if you think about the beginnings of photography or a new medium like that, there’s always a bit of hesitation,” he said.
He said the fact that people are actively counterfeiting NFTs, means there is a reality about them that should not go unrecognized.
“I think, again, there is a lot of responsibility for different states to regulate this so that people can confidently invest or have their assets,” Zugazagoitia said.
But Felicetti said regulation is something the crypto world is fighting against.
“There’s nobody policing it right now, and so it’s decentralized, and that’s what we’re trying to keep and make sure nobody’s able to tax what they do,” he said.
He said it’s a great market for new artists.
“How else can you have an idea and have it come to fruition?” he said. “If you needed $300,000, well, that’s probably steep – if you needed a handful of money to support your idea, to me, this is one of the best avenues to go about it.”
Keren said in order to successfully engage in the NFT world, you need to understand the currency, the market, and be cautious about which platforms you’re purchasing from.
“If you do this, you want to buy the real thing and not the fake one,” he said.
He said he believes the NFT world needs to be regulated closely in order to protect consumers, content creators, and ideas.
“One of the ways to fight this is to monitor these marketplaces, detect these NFTs and take them down,” Keren said.
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