Trading Cards
November 2023

Can Digital Trading Cards Ever Reign Supreme Over The Real Deal?

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Physical trading cards have been a popular collectible item for decades, with some rare cards fetching high prices in the market.

The value of physical trading cards is rooted in a few key factors:

  1. Performance: A card's value is directly attached to the performance of the athlete it depicts, and even the most rare card is nearly worthless if the player's performance is non-existent due to there being no demand, bragging rights, and corresponding value.
  2. Rarity: The scarcity of certain cards is a major factor in determining their value. The more rare and hard to find a card is, the more valuable it becomes to collectors.
  3. Condition: The condition of a card is also important in determining its value. Cards that are in excellent condition and have been well-preserved over time are more valuable than cards that have been damaged or are in poor condition.
  4. Historical significance: The historical significance of a card can also impact its value. Cards that are associated with important moments in sports history, such as a player's first professional game or a championship win, are more valuable than cards that are not associated with such events.

Athletes typically do not receive direct compensation for the aftermarket sale of their trading cards, but they do benefit indirectly via payments negotiated by their player's unions and leagues.

The popularity of a player's card can increase their overall market value, leading to increased endorsement deals and higher salaries. This is called hype, and just like the art industry there's plenty of players whose hype doesn't match up to their performance, and plenty whose performance far exceeds their hype. (see Nikola Jokic)

The rise of digital trading cards, such as NFTs (non-fungible tokens), has created a new market for collectors however just like art, shoes, and other tangible commodoties, there's something that just doesn't quite feel the same when it comes to well... digital pictures.

Digital trading cards offer some unique advantages over physical cards, such as the ability to easily trade and store large collections, but the disadvantages potentially outweigh these advantages. Trade shows, grading, textures, sparkles, shines, flaws, and simply being able to let your buddies admire your card is something that digital cards simply cannot repliate.

There's also the scavenger's allure of trading cards, where finders go to great lengths to find hidden treasures at garage sales and in the depths of Ebay.

It remains to be seen whether digital trading cards can ever match the popularity of physical cards.

The root of the value of physical trading cards lies in their physical nature and the associated emotional connection that collectors have with them. Collectors enjoy the tactile experience of holding and organizing physical cards, and the physical nature of the cards adds a sense of nostalgia and sentimentality that is difficult to replicate digitally.

That being said, digital trading cards have the potential to create their own unique value proposition. The ability to easily verify the authenticity of a digital card through blockchain technology, for example, could make digital cards more valuable in the long run.

Additionally, digital cards could potentially offer a more interactive and immersive collecting experience, with features such as augmented reality and virtual reality. This is the advantage of digital cards, and something that could create a completely different market that supplements the physical side.

Or, the physical side could stay ahead of the game and incorporate digital elements to the physical cards that keeps all of the allure and the integrity of the physical cards while ushering in a modern futuristic experience.

QR codes connecting to digital experiences or the metaverse could easily be incorporated into cards.

The value of physical trading cards is rooted in their rarity, condition, and historical significance, as well as the emotional connection that collectors have with them.

While it remains to be seen whether digital trading cards can ever match the popularity and value of physical cards, they do offer some unique differences and have the potential to create their own distinct value proposition.

Issa Hall, Esq

Issa has founded multiple ventures, is an author, and founding partner of Hall & Dixon law firm, with over a decade of experience in tech and law.

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