What motivates collecting? What does it mean for crypto collectibles? I try to contextualize collecting behavior with three personal stories.
Story 1: Flipping Nikes
I spent a summer in Cincinnati for a college internship. One day, I took the bus an hour and a half to the only local skate shop that was releasing a set (three pairs) of rare Nikes I wanted. I got there early, waited in line, bought two pairs of each style at ~$100 a pair, and took the bus back to my dorm.
Over the next month, I sold four pairs for 3-4x retail and kept two for myself. I did this a lot throughout high school and college and made enough to pay for pizza and beer.
The risk reward for speculating on rare sneakers was great. Prices would double and triple consistently, and in the rare case that the secondary market rejected a pair, Nike would always accept returns.
My motivations for collecting these sneakers was purely financial speculation. I didn’t particularly like the shoes and my friends couldn’t have cared less. But they were valuable to someone else, so flip them I did.
Story 2: Rares
I attended the Dota 2 International (TI) a few years ago. The International is like the NBA Finals for video games. For many years, it had the largest prize pool of any game. Fans from all over the world would come to Seattle to watch the best players compete for the ~$20M prize pool.
For many, the most exciting part of the event wasn’t the actual matches, it was “The Secret Shop”–a pop-up merch store that sold memorabilia only available during the few days of the event. Fans would pre-order items and then wait in line, sometimes for hours, to pick up their orders.
The most prized items were a set of figurines that contained a physical figurine and a digital chest that contained a random cosmetic item usable in game. Each figurine had a small chance of being “golden,” adding gold accents to the physical figurine and upgrading the digital chest to yield very rare golden cosmetics so coveted they sold for hundreds of dollars on the secondary market.
I don’t collect figurines or memorabilia, but knowing this was a popular part of the experience, I bought the full set of five. Why not just buy one or two? I didn’t think much about this at the time, but there was something unsatisfying about not completing the set.
I lucked out and got three goldens that year. They’re still on my desk. They’re not worth much anymore, but I like to have them around to remind me of the experience.
Story 3: Mallcore
As an Asian American in the Midwest, I didn’t fit in with most kids in elementary and middle school. I wanted to, badly, but I was more easily labeled as “other”–the minorities, the nerds, the tryhards–than normal.
I had a theory that if I looked more like everybody else, I’d be perceived as normal or maybe even popular. Because I couldn’t change my ethnicity, I tried to wear the same things as the popular kids. One time, I dragged my parents to the mall and convinced them to spend $40 on a hoodie. It was the color of a lunch bag and had a massive Vans logo plastered across the front. I had poor taste in clothes.
Disappointingly, nothing changed when I wore it to class the next day. Over the years, I kept testing my theory–collecting Abercrombie, Adidas Originals, Skate brands–signaling that I wanted membership in the majority. By the time it worked I no longer cared.
Three drivers of collecting
These three stories are meant to illustrate the three, interrelated drivers of collecting behavior: (1) financial, (2) psychological, and (3) sociological (Belk, 1995b).
- Financial collectors hope for financial gains. In a 1983 survey of 154 antiques and memorabilia collectors, 35% cited investment as their primary motive (Pearman et al., 1983)
- Psychological collectors pursue closure/completion/perfection. Danet and Katriel (1989) outline five strategies to attain this goal: (1) completing a series, (2) filling a physical space, (3) creating a harmonious display, (4) manipulating the scale of objects, and (5) aspiring to perfect objects.
- Sociological collectors pursue membership or status in groups of similarly-minded people (Olmsted, 1993).
When I flipped sneakers, I sought financial gain. Dota 2 figurines were about completing the set. Clothes were about belonging to the group.
These motivations are subjective and accretive. Different collectors can have different motivations for collecting the same object. I was able to collect sneakers for financial gain because there were counter-parties who collected for psychological and sociological gain.
A collector that has strong motivations across the board perceives the highest values in a given collectible. The most valuable collectibles today are strong triggers of all three: e.g. art, fashion, cars. As we spend more time online, we express our desire to collect digitally, buying things like game skins.
There’s some debate about whether crypto collectibles will be a big thing. Crypto collectibles bulls (like myself) argue that collecting is an evolutionarily programmed behavior and blockchain finally makes digital assets “sound” enough to store value in. Bears argue that the total addressable market is small, early efforts have low install bases and engagement, and blockchains (at least a proof-of-work chain like Ethereum) are terrible technologies for games.
It’s too early to tell whether crypto collectibles will be successful. The vast majority of today’s collectors are financial speculators playing a greater fools game. With few exceptions, we have yet to see collectibles issuers successfully drive psychological or sociological collecting1.
Financial speculation is the beachhead–an early indicator that crypto collectibles may succeed–but insufficient to reach the mass market or drive sustainable engagement. It’s the least powerful of the three motivators, and relies on the others to exist. We are most motivated to collect for ourselves (psychological) and for the people around us (sociological).
On the blockchain, financial speculation comes built in. If we want to reach the masses, we need to focus our efforts on deeper motivations.
One of the reasons for the success of our LAND non-fungible token is that our users are using that LAND to build a social world, tapping into psychological and sociological motivations. ↩