Opinions expressed in this commentary are solely those of MRD.
Maybe "crypto collectables" has yet to enter English vernacular like crypto currency; however, it's not far off. Or, maybe it actually is far off.
Background: the Ethereum blockchain's ERC (Ethereum Request for Comments 721) for a non-fungible token standard allows creation of a non-divisible and uniquely characteristic cryptoid, if you will. To date, realizations are data structures which can be rendered as images of cute animals or the like. And are even operands under a closed system of operations, such as "breeding". By the way, the point of system closure under a set of operations is the moment of power for that system. That is, where the fun starts.
When I first heard of cryptographic data structures over a blockchain as collectables (i.e. crypto collectables), I of course thought whaaaaaaaaaaaat. But quickly, my thought changed to cooooooooooool! Then I heard one sold to the tune of $100,000, and I instantly went back to whaaaaaaaaaaaat. And I continued to whaaaaaaaaaaaat over the weekend.
To answer my own nagging question over the weekend, a basis of comparison was required. Naturally, I took the quintessential, an often expensive, collectible known as a "baseball card" :-), and will run with that. So here goes.
The reason university economics departments are in humanities, rather than science or business, is because it's about human choice and behaviour therefrom. Economists may use scientific methods and tools, and in turn, business may use economics, but economics itself is about humanity's choices.
So if a human chooses to pay $100,000 for a crypto collectible or a similar amount for a baseball card, why might each be a sound economic choice or completely bonkers?
Firstly, what are we talking about? A crypto collectible is a data structure atop a blockchain, just 1s and 0s, but such that they come with guarantees blockchain technology can provide; assuming a well-distributed network blockchain of course. A baseball card is just a piece of rigid paper, but also comes with guarantees over a network - a network of people who collect/trade/buy/sell baseball cards. Crypto collectibles are extremely new and as such can only be traded/bought/sold, over speculation at this point. But not actually collected, like baseball cards are.
And therein lies the big difference. A baseball card has a backbone of more than 100 years of history in which a great number of people cherish extremely heartfelt memories of their own lives, having played the game themselves, gone to games with their families as children and as adults with their own, and romancing of baseball's history and figures. All for which they are willing to pay, have, and hold a physical symbol representing it all, and never to be parted. It's very human. A crypto collectible cannot possibly have all that at this point.
So could paying $100,000 for a baseball card be a sound economic decision? Absolutely. Is paying such an an amount for a crypto collectible? Ummm...no. They are currently, at best, only uh, cryptoidables.