Can NFTs Fix The Magic Industry?

Earlier this year, I spent a silly amount of money on a pixelated image of an avatar that looked a little bit like myself. What followed were six incredibly stressful days. I remember sitting in the park one day and just staring down at the pixels on my phone. It drove me a little insane. I’d have conversations with the tiny avatar of myself…

“I know you’re worth $1,700 little pixelated Rory, and you know you’re worth $1,700 little pixelated Rory, but what if no one else knows you’re worth $1,700 stupid pixelated Rory.”

Oh, the silly amount of money I spent on a pixelated image of an avatar that looked a little bit like myself if you squinted was $1,700. I’d done my research. I’d taken my time. I saw this as an investment. I bought my first Bitcoin back in 2017. I know how to do this shit. I knew if I just held onto this stupid fucking jpeg, I’d be making the big bucks in just a few months. That’s what I told myself, but really, I had spent $1,700 to drive myself fucking insane.

Much like God, on the seventh day, I chose to rest and sold the NFT for $2,800. I didn’t feel good about the $1,100 profits. I knew it would keep rising. As I write this post, I just checked on pixelated Rory’s current value — it’s now worth a crazy $8,400. Please remind me never to check its value ever again.

I suppose the takeaway from this story is that even if I think I fully understand and believe in NFT’s, it doesn’t mean I trust in them enough not to let them drive me mad.

Welcome to the wonderful world of non-fungible-tokens.

What the fuck is an NFT?

That’s right; this week’s post contains multiple f-words (deservedly so). Let’s start with the basics and wrap our heads around what exactly an NFT is before we explore how they may or may not fix the magic industry. We’ll also take a look at Bicycle Playing Cards’ recent money grab, I mean business venture, as they launch their first NFT’s this week.

Strap in because here we fucking go.

NFT stands for non-fungible-token. Not the best of names, but bear with me. An NFT is a digital token that exists on the blockchain to record proof of ownership for the person holding it. Each token is entirely unique and can never be replicated or replaced.

NFTs can transform digital works of art and other collectables into one-of-a-kind, verifiable assets that are easy to trade on the blockchain. NFTs let you create and trade almost anything as an identifiable collectable item. Jack Dorsey, the founder of Twitter, sold his first tweet for $2.9 million, a video clip of a LeBron James slam dunk sold for over $200,000, and a decade-old "Nyan Cat" GIF went for $600,000.

Some people will counter the idea of an NFT with, well, can’t I just take a screenshot of the NFT and then technically own it too? Well, no, not quite. I could take a screenshot of the Mona Lisa, and I certainly wouldn’t become its billionaire owner.

Other people will counter and say, well, just because you own the NFT doesn’t mean you own the copyright. Anyone could print and sell t-shirts of your NFT, for example. And these people would actually be absolutely right.

The UK's Advertising Standards Authority had this to say in its April 2021 guidance on advertising cryptocurrencies:

OK — suspend any disbelief or confusion and run with me for a moment. Forget about how NFTs work and just trust that they provide a way to prove ownership of a collectable token. Are you suspending disbelief? Good. Now, let me explain two aspects of NFTs that excite me as they apply to the magic industry.

A Blockchain Ledger.

Magic has quite a steep history of theft, plagiarism and piracy. I actually believe piracy is quite good for magic for the most part. I’ll probably write about that in the future. But the concept of a ledger is quite fascinating when you think about magic.

Imagine if every trick you purchased arrived with an NFT token, verifying not only that you are an actual owner of the trick but also that you bought it from a genuine owner or its creator. Woah, could a ledger end piracy, fix plagiarism and reduce theft in the magic industry. Pirate sites would be unable to provide the NFT token with their pirate products.

What if you see someone performing a trick you are unsure they own, you could easily look it up on the ledger? Would this deter annoying magicians from publicly performing tricks they didn’t buy?

Smart Contracts.

The function of an NFT is based on underlying smart contracts. These are primarily pieces of code that allow the network to store the information transparently.

These contracts help verify ownership and handle the NFTs transferability. But NFTs are programmable far beyond the basic functions. You can link NFTs to other digital assets, handle royalty payments, and include permanent identification information.

The part that excites me is in the royalty payments. You can programme an NFT such that the creator gets a royalty of every future resale. And people do. Many NFT creators receive even 10% of every resale of their artwork. For artists, this is incredible, as artwork tends to go up in price long after the original sale. We’ve seen prominent artists like Banksy highlight how paintings he originally sold for £100 are now on sale for millions that’ll go entirely into someone else’s pocket.

It’s tough to make a living creating magic. Some of the best magic creators sell tens of thousands of units. But most magic creators will sell 300-1,000 units at a push.

I’m all for purchasing things second hand. It’s good for the environment, and it’s the right thing to do. But buying magic tricks second hand is actually quite damaging to the magic industry in its current state. You’re taking revenue away from a magic creator who probably isn’t making enough money to invest enough of their time into creating great magic.

Imagine if magic creators could capture a royalty payment from every future resale of their trick. How many new creators would appear? How much more time could great creators spend inventing magic?

Bicycle Launches NFT Genesis Collection.

The go-to playing card manufacturer for magicians just launched its first NFT collection. Artist Adrian Valenzuela designed the collection called “Genesis”.

It all feels like a big stretch to justify to venture into the NFT space.

Haven’t you always wished you could get access to exclusive Bicycle cards events with another 52 people eager to spend $12,000 on a digital playing card? Who doesn’t want to “journey alongside Bicycle.”

Personally, it all feels a little unnecessary. Buyers must agree to Bicycle’s terms listed on their main website, which make it extremely clear you do not own the artwork and also restricts their use. This is not something I’ve come across before. They also make it quite clear they do not extend the majority of the perks to the secondary market — so only the people who buy the NFTs directly from Bicycle get all the perks.

I might be totally wrong; maybe these will dramatically rise in value over the years. At the time of writing, most of the cards have zero bids, but a few have highest bids as high as $4,000, and one joker playing card just sold for a massive $13,000. That's right, $13,000.

Most of the highest bidders, like @mooncat2878, do not strike me as magicians, cardistry or even playing card collectors. @mooncat2878 has over 100 rare NFTs in their public collection and over $170,000 in their publicly listed wallet.

It feels odd or misjudged, or maybe just a carefully constructed spin that Bicycle is promoting this as if it’s created with the passionate deck card collector in mind.

Oh no, I can feel that weird uneasy NFT stress returning. Is it crazy that people are bidding upwards of $12,000 for a digital playing card that Bicycle make very clear in their terms you do not own at all? What do you think? Do projects like these have a net positive for NFTs and Crypto as more people get to discover this strange new world? Or do they do more to put off potential adopters and muddy the waters?

The NFT auction is ongoing with some of the items ending the day this newsletter post goes out. I'd love to know your thoughts on how and if the magic industry should embrace non-fungible-tokens.