THE NEW AGE OF TRADING CARDS – PANINI BLOCKCHAIN – IS IT A GAME CHANGER or WILL IT BE RISKY?

We are in this day and age wherein technology helps us to innovate and provide effortless answers to our problems. One of the most recent revolutions is what we call ”blockchain.” I’m pretty sure you have heard of it. We associate it with one of the more influential investment vehicles  bitcoin-a digital currency which is limited and encrypted in the blockchain. So what’s with Panini America trying to get into this new digital trend? As far as we know, they want to make a platform which is the blockchain for all of their trading cards. A blockchain is basically a transparent ledger where everyone can see it in the system which there is an assigned value to determine how many “currency” or (in this case) trading cards you have.

There has been no clear information out yet for us collectors out there from Panini America except that it will be backed up by a physical card and be sold in an auction platform. However, this is the only way they can implement such. They will be generating encrypted values to assign it to each of the cards they are offering. Further, everyone who wants to participate will need a virtual wallet or portfolio which will be our ledger in their blockchain.

Wait, what? Virtual wallet and ledgers….

In today’s technological realm, this can be seen in digital currencies wherein we store our virtual money in a ledger hardware. A cost of a ledger ranges $59 to $170 depending on its features. Will Panini America provide this ledgers or are they going to give a virtual ledger account like coinbase? Coinbase, a prominent digital currency exchange, provides our own secure virtual wallet and controls the whole ecosystem of buying and selling virtual money. So far, the company has protected millions of user’s accounts in safeguarding their investments. Will Panini America do the same in terms of providing a secure investing environment and handling customer support 24/7?

You might be asking, “Do we even need it?” or  “Is it safe?” As recent as 5 years ago this would be a concept that would transcend any reasonable idea within the hobby. But this world of digital investment and asset management is accelerating extremely fast. In my educated opinion, this concept will help us collectors but it is not a necessity. One way to see the positive side of a collecting and investing standpoint in digital card blockchain would be to understand that this grants the validity of card collecting being an actual commodity / investment vehicle. (I know, I know… cards can’t be investments!!??) Moreover, this helps transferring ownership of the card from one place to another. It eliminates the hazards of damaging the actual card and preserving it from natural hazards. Further, third party grading services like PSA and BGS will be forced to take a backseat in this situations. This gives us an assurance that our card will be the only one in the whole system and counterfeiting or second printing will be gone. These are all reasons to get excited about the prospects of this being a trusted system. Imagine a world wherein you as an investor can easily access your portfolio and its actual market value. No more fake eBay sales and rumored local transactions. You can now easily define your market value and portfolio worth. Third party grading and authentication inconsistencies won’t occur as we are only dealing with virtual cards. Misplaced your favorite card? Tracking it will be easy in a blockchain system as we can see in our transparent ledger where it is contained.

Further, third party grading services like PSA and BGS will be forced to take a backseat in this situations.

But one of the key strengths is that this may influence more than just collecting. This will open up a new area which can lead into gaming wherein the digital cards can be used. Allowing a new function to the card will definitely grant a huge demographic market for the company. It also gives value to veteran cards if this were the case. Another important effect of the concept is that it will make buying and selling easier. There will be clear evidence on how much the card values. Topps partnership with StockX is basically what Panini America wants. They want to make a platform which determines the value of their cards without the middleman. Moreover, we should also be given the proper information on how many cards were printed which can help us know and gauge the value of the card. This is what I expect to happen with the Panini America launch of their blockchain system and beyond.

However, with every new idea there are risks. Is it even ideal that we are doing this with the current situation of the hobby? Are we even certain that they were able to get the best coders or programmers for their blockchain? There will always be that question of safety. Time will only tell if Panini America actually got a fool-proof coding for their blockchain system. As of the today – I’d argue Panini has struggled with the straight-forward task of handling a First Off The Line releases… but they want to pursue a technologically heavy concept? This thought legitimately scares me. Also, if they are going to push through with this idea being a digital asset, is it considered legally an investment? Laws will now be more strict in this sense which might be a pain to the investor despite being a safeguard if anything negative occurs. How about your local card shop? Will they be affected? It is a possibility that in a mass adaptation of the blockchain concept it will make brick and mortar store or even online stores obsolete. This is because the blockchain is already its own ecosystem wherein you can buy the card, sell the card, or even trade a card directly with them. Isn’t this too much of an operations for a medium sized company of Panini America? Maybe that’s the reason of Topps made a deal with StockX in handling the problem of value determination of our cards. Topps knows that they can’t handle the volume of work to operate on a huge scale that’s why in terms of handling the problem of transparency in determining the value of their cards they partnered with StockX to ease the process in their end. Also, StockX relies on PSA and BGS to determine the authenticity of the card. On the other hand, Panini America wants to handle all of the department with the use of the blockchain. Again, this is an interesting subject that we must look into. The use of the technology is limitless but the hazards and effects to livelihood are real.

As of the today – I’d argue Panini has struggled with the straight-forward task of handling a First Off The Line releases… but they want to pursue a technologically heavy concept?

There are two sides of the coin to this story but definitely a lot of gray areas which we cannot solve until Panini gets closer to their launch. There is so much potential in this concept…. but, are they ready to transform a sports card manufacturer into a quasi-fintech company? They currently have approximately 140 employees and they will be dealing with the physical and digital card support. Overall, I can see this as a good step forward for the company and the hobby but we need to tread lightly. Transparency from a company is again the most important concept we want as an investor which the blockchain uniquely possess. On the other hand, legitimacy of Panini America as tech company remains a mystery. No investor would want to hop on board if it is a trainwreck waiting to happen. Do you consider this as a good step for our beloved hobby? Should our hobby stick to the physical realm? It’s up to us and our voices in how we would carefully react to this innovative concept by Panini America.

Thanks for reading!

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Paolo

“Paolo is a philosophy major, veteran and a sports cards enthusiast. His dreams are that, one day, he’ll be a published writer and to have better reasons in making excuses to his wife when buying a card.”

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