Legacy Blockchain Trading Cards as an Investment
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Though blockchain technology is only a few years old, trading cards have already played an important role in its history. In the early 2000’s Magic: The Gathering became a wildly popular game that involved playing and trading physical cards.
In 2006, a website was created to facilitate the buying and selling of these cards, and it was known as “Magic: The Gathering Online eXchange,” and for the sake of a shorter domain name, MtGox.com was the address.
The site was later repurposed as a bitcoin exchange, and in bitcoin’s infancy, Mtgox.com was handling the majority of bitcoin transactions. In 2013, whether by hacking, incompetence, or outright theft, a large number of bitcoin went missing and the price of bitcoin plunged, taking years to recover.
Though trading cards played no direct role in any of this, it is an interesting tidbit that MtGox, a name closely associated with one of Bitcoin’s darkest hours, was derived from a card trading game.
Spells of Genesis
In 2015, a company named EverDreamSoft held an ICO to fund a blockchain-based card trading game called Spells of Genesis. They introduced a new token called Bitcrystals to be used as the in-game currency, and for players to use as a currency to buy and sell cards outside of the game. The game has been in development ever since and is set for launch sometime this month.
The game revolves around a fantasy world whose lore is unclear to me even after digging around their website a bit and asking on their slack. Regardless, many of the cards have characters and themes based on events, personalities, and projects from the blockchain world:
The cards are released in limited number, with certain cards being more limited than others. The rarest of the original set is the Satoshi card, shown here, with only 199 in circulation (1000 were originally created as rewards for the the crowdsale participants, but there were only enough participants to warrant distribution of 199, so the remainder were sent to a “burn” address, effectively destroying them.) Other cards were released in various quantities, but even the most “plentiful” cards have only 2000–3000 in existence.
These cards exist as Counterparty assets, a “metalayer” on the Bitcoin blockchain. As such, trading them back and forth is very similar to simply sending or receiving bitcoin. This does need to be done from a Counterparty-compatible wallet, however. Counterwallet.io has worked well for me.
Here is an article with more detailed information about buying/selling the cards. I personally missed the ICO, but heard about the game and cards shortly afterwards. At that time I looked into buying some, but information was scarce about how to do so, and the main method to do so was through Counterparty’s “Dex,” a peer to peer exchange that I did not use.
However, there is a much simpler way now. The team has released a mobile app called “Book of Orbs” which allows for very straightforward purchase and sale of cards. It creates a Counterparty wallet/address for you, and lets you buy and sell the cards with relative ease.
The app has worked well for me on my iphone; presumably it works well on other mobile platforms as well. To me, this app is a game-changer in the accessibility of these cards. If they can integrate some kind of function to allow purchase of cards or Bitcrystals directly with fiat, even more so.
Blockchain-based Cards as an Investment
The world has come to accept and value rare collectibles as a form of investment. In terms of hard assets, rare baseball cards routinely trade for hundreds of thousands of dollars, and occasionally millions. Is it insanity to think that a blockchain-based asset might do the same?
Perhaps. But the number of people and amount of money currently involved in blockchain-based projects and investing is currently on the flat end of a parabola. As more and more people become comfortable with trading assets that are intangible (including coins/tokens themselves), I don’t think its a stretch to think that there will be some sentimental value to certain rare assets. The Spells of Genesis cards have the advantage of being both the first of their kind, as well as quite rare.
It does say something that the cards are trading now at fairly impressive prices. The Satoshi card has sold for as high as $3,700. If you wanted to buy one today, as far as anything currently available on the Book of Orbs app, or on the Dex, the current price sits at around $5,000.
The crypto world has plenty of rich long-term Hodlers, and traders whose fortunes rise and fall. It’s not a stretch to think that some of these wealthy individuals will see the Satoshi card and other rare cards as status symbols.
SoG: The game
The dev team is probably not going to like what I’m going to say next. There are two main aspects of what SoG has to offer: The cards, and the game. In its current state, in my opinion, the game adds nothing of value. If we’re going to use baseball cards as a frame of reference, the game is the bubble gum that comes with the cards. You might enjoy it for about 30 seconds, but it loses its flavor quickly.
Here is a short companion article that describes more about the game and my experience with it, but to sum things up relative to existing games, imagine if a 1980’s era “brick breaker” game had a baby with a slightly more modern arcade pool game, only to discover that their spawn is a few chromosomes short of a full set. The game is simply not very impressive.
To be completely fair, the final version of the game has not been released, and my experience with it was purely from the web-based version, since the mobile version is not yet available in my country. Perhaps the final release will be much more compelling. Prove me wrong SoG team, prove me wrong!
Conclusion
To me, the value proposition of the Spells of Genesis assets is entirely in holding the cards as collectibles. I believe they will become a status symbol of sorts, and the rarity of the cards, particularly the Satoshi, is a good setup for rising value.
I also think there is probably some value in buying Bitcrystals (BCY), the currency used to buy cards within the Book of Orbs app (and also on the Counterparty Dex exchange). The tokens themselves are relatively rare, and a portion of the tokens from new card sales are burned each and every month by the team, meaning they will only become more scarce. So if you’re not particularly interested in collecting cards, buying BCY gives you some tangential exposure to the space.
Full Disclosure: I hold some Spells of Genesis cards, and Bitcrystals. I was not an ICO particpant, nor am I a member of the SoG team.
