With the explosive growth of the non-fungible token (NFT) ecosystem, I thought it would be interesting to examine the world's most expensive digital items. While the sale price of these items is incredible, in ten years they will likely be paltry in comparison to the prices that digital items will get in the future. Not only because digital goods are becoming more common but mainly because the digital items of the future will be blockchain-based. Blockchain-based unique digital assets, also called non-fungible tokens (NFTs) allow for commerce to occur easily, anywhere in the world and securely. Blockchains will enable digital items to have never-before-seen liquidity and create a truly interconnected global market for digital items. It is for these reasons that I expect everything on this list to outdated within the next few years. It is also probable that within ten years the NFT art market will rival the traditional art market; a $67 billion dollar market as of 2019. The functional (in-game/world digital assets) NFT market will also likely surpass many physical real-world economies. The functional NFT market eventually emerging as a $200 billion dollar market seems reasonable, especially if a functioning Metaverse (Metaverse is a virtual environment where people live and work in) develops. This would put the functional NFT market around the top 50 countries by GDP.
Interestingly enough, the most expensive digital items in the world are not blockchain-based. At least not yet. They are from Entropia, a game created in 2013 with a reported 1 million registered users. Entropia has a huge advantage in selling in-game items since it has grown a dedicated community over the past eight years. Users tend to spend more as they grow deeper connections to a game. The NFT market in total has only been around since 2017, so we are in the extremely early days. Nevertheless, the sale price of NFT-based assets has been astonishing. Let's take a look at the list.
Zeuzo was an incredibly powerful character in the popular game World of Warcraft. Zeuzo was maximum level 70 and had incredibly powerful armor and weaponry that was only attainable after playing for countless hours. The character was sold to another player in September 2007 for roughly $9,500. The sale made headlines but it violated Blizzard’s (the developers of World of Warcraft) terms of service. It became apparent that Blizzard does not want players to profit off of World of Warcraft unless they receive a cut. Shortly after the sale, Blizzard terminated the account and deleted Zeuzo. All of the capital and more importantly, time, invested in the item disappeared in an instant. This is the risk of investing in non-blockchain based digital items.
$25,000 - Sigma Battlecruiser - Crypto Space Commanders (blockchain-based asset)
In February 2019, the Sigma Battlecruiser, the most powerful ship in Crypto Space Commanders, sold for $25,000. While $25,000 seems extremely high, the Sigma Battlecruiser was sold again in September 2019 for $35,000. The sale allotted the original owner a tidy profit of $10,000 (40%).
Baus is an extremely powerful pre-released character in the upcoming game, Neon District. Baus was purchased in April 2019 for $25,000 during the Founders sale. Fortunately, Baus is blockchain-based so its owner never needs to worry about item deletion. The most interesting aspect of Baus is that its owner receives special privileges such as helping design gameplay mechanics, color scheme, Baus attributes, and even game background music. Allowing asset owners to have deeper game involvement is an attractive reward and hopefully more games will follow suit.
Gods Unchained is an online trading card game that blasted onto the scene when a winning player famously exclaimed, “Liberate Hong Kong!” during a Hearthstone (Hearthstone is an online digital card game) tournament live stream. This controversial statement prompted Blizzard (the developers of Hearthstone) to revoke his winnings and temporarily ban him. This obviously caused a massive backlash within Hearthstone and the wider trading card community. Gods Unchained seized the moment and gave the winning tournament player the same amount of prize money he was owed from the Hearthstone tournament. Along with that, they marketed heavily towards the Hearthstone community who were disenchanted with the centralized and overbearing approach Blizzard was taking. Gods Unchained happens to be creating a game in which they themselves (Gods Unchained developers) do not have the ability to take any user’s cards away because they are blockchain-based assets. These factors likely contributed to the huge sale of two of their Mythic cards, Atlas and Prometheus. Mythic cards are the rarest and strongest cards in God’s Unchained. The Atlas Mythic sold for $30,000 and the Prometheus Mythic sold for $34,000, cementing them as some of the most expensive digital items ever sold. An interesting fact to note is that in November 2018, Hearthstone had a reported 100 million users while Gods Unchained had around 15,000. When a blockchain-based game eventually has a similar amount of users to a “mainstream” game like Hearthstone, the price of their digital items could become astronomical.
The Ethereal Flames Pink War Dog is quite a mouthful but makes the list because in November 2013 it was purchased for $38,000. This unique asset is from the extremely popular game, Dota 2. With monthly active user numbers nearing 12 million, Dota 2 has a thriving user base and is one of the most popular games in the world. Unfortunately, this asset is not blockchain-based. After the sale, there was an update to the game that essentially made the Flames Pink War Dog characteristics not as rare and devalued the item to around $4,000-8,000 dollars, representing a respective loss of 78% and 89%. Since the update occurred just a few days after the sale, I highly suspect the developers implemented this to discourage future similar private sales.
They say sex sells, and that motto seems to ring true even in the virtual world. In March 2007, an individual from the extremely popular game, Second Life, sold Amsterdam for $50,000. The adult-focused city was one of the most popular locations in Second Life. I know you may expect a horror story because this asset is not blockchain-based, but fortunately, the sale commenced via eBay and no issues followed.
Proxima Outpost is a space station in the game Crypto Space Commanders. Space stations are valuable because they allow players to buy, sell, build, and refine resources. These actions all have costs and the space station owner can collect a portion of the fees. Proxima Outpost is so valuable because it is the only space station located in a “safe zone” and is player owned and operated. All other space stations in the safe zone are controlled by game developers and future space stations must be built in the “PvP zone” where players can attack you.
This incredible sale occurred in May 2019 for roughly $110,000. F1 Delta Time is a soon-to-be-released F1 race car game where users compete by building a vehicle and team. Although the F1 Delta Time has the best statistics in the game, it is an extremely large sale for an unreleased game. The purchaser must have had confidence in the game’s success and their ability to resell the asset in the future.
$114,000 - Genesis Kitty - CryptoKitties (blockchain-based asset)
This CryptoKitty sale made headlines on mainstream news networks like CNN, CNBC, and more. It's possible that it caused so much buzz because the wider crypto bubble was in full swing, or because it simply sounds absurd to pay about $100,000 for a digital cat. The Genesis Kitty was the first cat ever made by Dapper Labs, the developers of CryptoKitties. While the hype has died down since the launch, CryptoKitties continues to have an extremely committed community which will likely continue because the assets are blockchain-based. I used Genesis Kitty as an example because it had so much mainstream attention, but other high-value CryptoKitty sales are listed below.
In December 2009, an Entropia user bought the Crystal Palace space station, a valuable location that provides the owner with a place to set up businesses and earn income. Whether or not the purchase was profitable is unknown, but it does rank in the top three most expensive digital asset sales.
$635,000 - Club Neverdie - Entropia (non-blockchain-based asset)
Club Neverdie is an exceptionally popular nightclub within the game Entropia. The club was originally purchased for $100,000 in 2005, but the owner sold it in November 2010 for an astonishing $635,000. The club was apparently a cash machine and made a reported $64,000 in Q1 of 2010 alone.
$6,000,000 - Planet Calypso - Entropia (non-blockchain based asset)
In January 2011, a company purchased “Planet Calypso” from MindArk, the developers of Entropia. This purchase enabled the buyers to build their own games and businesses on the planet. The buyer, SEE Virtual World company, operates various businesses within Entropia so the purchase furthered their business goals.
Virtual Land Sales
Although not exactly a digital item, I want to briefly touch on virtual land/property sales because this market will likely be immensely valuable. One can argue that plots of virtual land are semi-fungible in the sense that one piece of land is similar to another, compared to unique digital items that are non-fungible. It’s a flimsy claim to say that digital land is more fungible than digital items, but let’s roll with it.
$2,500,000 - Calypso Land - Entropia (non-blockchain-based asset)
Entropia is setting records again. In April 2012, an Entropia user bought $2.5m worth of land on the planet Calypso.
In the blockchain-based virtual world Decentraland, users can purchase land and build anything on their property. This was the first virtual world to launch property ownership on a blockchain, and although not yet launched, there already is a thriving real estate market. Below is a sample of large Decentraland property sales.
An estate in Decentraland is when the owner of multiple touching properties conjoins them into a single property. The Decentraland Estate was made up of a large number of individual land plots and was sold in December 2018.
Sold in May 2019, this Decentraland estate sold for roughly $80,000. The reason for this high sale price is because of its amazing location and the fact that the estate is made up of 64 individual land plots.
This single piece of land oddly sold for an astonishing $179,000 in March 2018. The only reason for the high price that I can determine is its prime location on a road and near the Genesis Plaza. The Genesis Plaza is where all people in Decentraland first spawn, so there should be heavy user traffic. The absurd price paid for this property is evident as it is currently (December 2019) listed for just roughly $20,000. That’s an 88% markdown from its purchase price. Ouch.
There are numerous virtual worlds with thriving property markets, but nothing currently seems to rival Entropia and Decentraland. I think we are at the dawn of extremely large and active virtual property markets. With the rise of true digital assets ownership via blockchains, we now have the perfect infrastructure for virtual property markets and with blockchains native commerce integration, those property owners can build businesses on their land.
What Did We Learn?
Friends don't let friends buy non-blockchain-based digital items! Also, people sure do spend a lot of money on digital items. Okay, so I’m joking about never buying digital items that are non-blockchain-based but any items on centralized/traditional servers are at the whims of game developers. There have been too many instances of users selling items and having their accounts banned, items deleted, or patched over to reduce their value. Games and virtual worlds that utilize blockchains tend to take a more fair market approach and encourage commerce within their environments. I’m not saying blockchains are perfect and will solve all gamer problems but they do make the dynamic between game developers and users more equal. Truly owning your assets leads to greater confidence in markets and high price tags on digital items. As you may have noticed, many items on this list are blockchain-based and the sales occurred just in the past year or two. Once the blockchain game ecosystem is more mature, digital item sales records will likely all be blockchain-based assets.
When I see the sales figures from Entropia, I think about the possibilities of an entire virtual ecosystem where thousands of games are all using blockchains for their assets. If these games and virtual worlds all use the same blockchain or blockchains that can interact, it would connect every virtual economy. Imagine Minecraft, Fortnite, and World of Warcraft all using the same financial infrastructure. Allowing their assets and capital to easily trade on the same interoperable infrastructure will increase global digital item liquidity like we have never seen before. If I had to make a guesstimation I would say that within five years, every item on this list will be blockchain-based and the $6,000,000 record sale of Planet Calypso will be broken.