Exploring the Fascinating World of NFTs
Why Do People Buy NFTs? Fetch high prices? Why does the public continue acquiring NFTs? Last year, Beeple made headlines when his digital collage sold for a staggering $69 million. NFTs have caught the attention of crypto investors and collectors alike, with many looking to purchase one before the trend ends.
To gain insight into this new market, CenturyLink recently surveyed 1000 US citizens regarding their attitudes toward non-fungible tokens. While 22% stated they wouldn’t buy in, 32% saw it as an opportunity to acquire something expensive like designer clothes or even a virtual home.
Interestingly, 36% admitted that they bought an NFT to resell it for a profit – further demonstrating the potential investment opportunities available through non-fungible tokens. This essay looks closely at why the NFT market is booming and presents compelling evidence of why you should consider adding NFTs to your portfolio.
8 Reasons Why People Buy Non-Fungible Tokens (NFTs): Exclusivity
The allure of NFTs lies in their exclusivity, which is reflected in the market’s demand for limited editions. Artists and creators take advantage of this by releasing a limited number of NFTs, making each unique and valuable.
An excellent example of this is the Bored Ape Collection. With only 10,000 individual NFTs in existence, each piece’s distinct features contribute to its scarcity and raise its value. This exclusivity has led to record-breaking sales for the collection, with some pieces selling for millions of dollars. For instance, #8817, the most expensive Bored Ape, sold for an astounding $3.408 million.
Irreplaceability and Non-Replicability Nature of NFTs
The unique characteristics of NFTs, such as their irreplaceability and non-replicability, result from their underlying intelligent contract technology. Utilizing blockchain, the smart contract governing an NFT is stored in a tamper-proof and immutable manner, ensuring that the digital asset is one-of-a-kind and cannot be replicated. This makes it difficult for unscrupulous individuals to counterfeit original artwork and deceives buyers. Furthermore, blockchain technology prevents the replacement of the original NFT, providing added security for the ownership of these digital assets.
As a Form of Investment
Regarding investing, NFTs are a revolutionary tool for art enthusiasts. Similar to traditional investments such as Bitcoin, gold, and silver, NFTs provide a way for individuals to preserve and grow their wealth. Many buyers have also seen substantial returns on their NFT investments. For example, an investor named Pablo Rodriguez-Fraile purchased a 10-second video NFT for around $67,000 in 2020 and then sold it for a staggering $6.6 million the following year.
The outbreak of covid-19 has sparked a shift in how people view currency. With inflation on the rise, many are beginning to question the stability and security of fiat currencies. This has led to increased uncertainty and worries about the value of investments if another inflationary event were to occur.
In contrast, the prices of cryptocurrencies have seen significant growth during the pandemic. This has contributed to the growing interest in alternative forms of currency, such as NFTs, which offer a level of decentralization and security that traditional currencies cannot match. As people become more skeptical of fiat currencies, the demand for these alternative forms of currency will likely continue to rise.
A Means of Showing Support for Preferred Creators
The NFT revolution has been a game-changer for artists and musicians. Famous names such as Steve Aoki, Grimes, and Kings of Leon have all sold their works as NFTs.
Many individuals buy NFTs as a way to support and show appreciation for their favorite artists and creators. They also feel like they own a piece of the song or album. Additionally, music NFTs have become increasingly popular as they can also act as tickets to events and concerts.
Crypto community building
The Bitcoin ecosystem is renowned for its tight-knit community, which is viewed as one of its key advantages. Within this community, groups of digital artists produce unique, one-of-a-kind collectibles that other members can acquire.
Many experts attribute the success of NFTs to this sense of crypto community building and belonging. People are willing to spend large sums of money on digital tokens, often reaching into the hundreds of thousands or even millions, due to the feeling of connection and ownership that these items provide.
Collectors Universe Value NFTs as Unique Pieces
Investing in NFTs allows individuals to own a unique collection of items and grants access to exclusive experiences and privileges. From sports teams to musicians and various industries, NFTs are being introduced to offer fans and collectors special perks such as VIP access and meet and greets with celebrities.
It’s worth noting that NFTs are not limited to digital images, as various media forms are converted into NFTs. For instance, the NFL is selling game highlights as NFTs, and the album “When You See Yourself” by Kings of Leon was available as an NFT compilation. Even classic comic books are being released as NFTs by Marvel. Ultimately, individuals buy NFTs for the same reasons people from collector’s universe purchase physical goods, to own a piece of something they value and cherish.
Numerous blockchain-powered games have introduced NFT tokens that possess functionalities within the game. These NFTs encompass a wide range of items, such as trading cards, characters, skins, and virtual real estate, NFT games on android or on Apple.
While some games require players to purchase NFTs to participate, others provide the option to play for free while still allowing players to collect or purchase NFTs as part of the gameplay.
Many individuals also choose to acquire gaming NFTs as they grant them ownership over a piece of the game and the ability to trade or sell their NFTs with other players. Additionally, some gamers take pleasure in obtaining in-game currency that holds actual monetary value in the real world.
Acquiring an NFT does not ensure that its worth will rise over time. The NFT industry is non-volatile but can be difficult to predict. Various elements influence the value of NFTs, but ultimately it comes down to people’s preferences.
For instance, the individual who owns the first tweet from Dorsey recently attempted to resell it, but the level of interest and bids could have been more impressive. This occurrence highlights that the NFT market may be experiencing a bubble that could eventually burst.
Why do people buy NFTs: Summary
NFTs continue to take the internet by storm, despite a slight dip in the market in 2023. There are many reasons why these digital assets have become so popular, and they are certainly an option to consider if you are looking for various ways to utilize them – such as supporting a creator or having access to a special event.
However, before investing any money in NFTs, you must do your due diligence and research the project thoroughly. While there is potential for high returns, investors should be aware that they may also face losses when dealing with these digital assets. Additionally, it’s wise only to invest what you can afford to lose – no matter what type of investment you choose.