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We as humans have an innate desire to seek out and obtain items that we believe to be rare and worthwhile. Sometimes those items carry cultural significance, like gold and art. Yet, oftentimes the items we collect hold significance to much smaller groups of people, like Pokemon cards and sports memorabilia.
Regardless of how refined your tastes may be, satisfying the itch to collect has become big business. In fact, it’s estimated that the collectibles market is worth nearly $400 billion USD. Add to that the explosion of popularity for digital collectibles like NFTs, and it’s not hard to imagine that the world will soon be spending hundreds of billions more.
We can gain an understanding of what’s driving our urge to collect scarce and valuable items by looking at it through the lens of basic human survival: Our civilizations have largely been populated for millennia by people who worked day in and day out just so that they could have a roof over their heads and food on their tables. It’s understandable then that those same workers would want to exchange any excess earnings or resources for a collectible or other good that would retain its value (i.e., purchasing power) over a long period of time.
Tom Brady and a One-of-a-Kind Ball
Let’s take a look at a recent example within the realm of professional sports. Sports of all varieties have been around for hundreds of years. For many fans around the world, sports have become practically a religion over the past several decades. That’s certainly true for American Football, where another iconic collectible was minted just the other day. The collectible in question came courtesy of legendary player Tom Brady who succeeded at his sport in a way that no player in history ever had: He completed the 600th touchdown pass of his (illustrious) career.
If you’re not a fan of American Football, then perhaps this news doesn’t mean that much to you. But to mega-fans of the sport who have money to spend, the ball that Tom Brady threw could easily become a key piece of a collection that would drive other fans wild. After all, no one has ever done what he did before. In short, that ball is one-of-a-kind. It’s so unique that experts in the football collectibles marketplace have estimated that the ball is worth nearly $600,000 USD. Quite an impressive price appreciation for something that was worth nearly nothing before the game.
One lucky fan almost walked away with the iconic piece of memorabilia too. In what has become rather a controversial move, one of Tom Brady’s teammates handed the ball to a random fan in the stadium, not realizing the importance of what he had given away until a few minutes later. Luckily for Tom Brady, the fan in question was convinced to give the ball back in exchange for a pair of signed uniforms, season tickets to the team’s games, a thousand dollars worth of items at the team’s own memorabilia store, and one Bitcoin.
Wait, why a Bitcoin?
Yes, you heard that right. The fan managed to walk away with an entire Bitcoin as part of the deal. Not a bad takeaway, although the fan certainly still got the short end of the stick since the ball is assumed to be worth far more than the one Bitcoin and gifts he received.
Actually, the fan technically didn’t receive the Bitcoin until a couple days after the game. As media outlets started posting about the raw deal he had received by trading a half-million dollar collectible for a couple thousand dollars worth of goods, Tom Brady took to social media to offer the Bitcoin in addition to the other items.
When it comes to Bitcoin, I don’t believe in coincidences. In other words, I believe that Tom Brady was very thoughtful in his decision to give Bitcoin in exchange for his one-of-a-kind football. After all, the main reason that both the ball and the Bitcoin are valuable is because of their innate scarcity. In other words, the ball is so valuable because it’s the only one in existence, and the Bitcoin is so valuable because it’s one of only twenty-one million that will ever exist.
It seems to me that Tom Brady understood that the fan in question had given up something that was only going to grow in value. What better way to compensate that person than by offering him something like Bitcoin that is also expected to grow significantly in value?
All in all, I don’t actually think that the guy who gave back the ball is too bad off. He’d certainly be in a better position if he had received fair market value in Bitcoin for the ball (i.e., ten Bitcoin, currently valued at around $600,000). But I believe that the long-term prospects are far better for Bitcoin than for the Tom Brady football. If we think about it, there are probably only a few dozen fans in the world who want that ball and are also in a position to pay over half a million dollars to buy it. Meanwhile, Bitcoin’s total addressable market, or the total number of people who might want to ever buy Bitcoin, is eight billion and counting.
You do the math.
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