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Why do people buy NFTs?



The new frontier of monetizing digital creations through NFTs (Non-Fungible Tokens) has brought about a paradigm shift, whereby creators can now showcase and protect their unique works, such as art pieces, music tracks, or videos, all through the use of blockchain technology. The popularity of NFTs also means that their market value often exceeds that of traditional assets, based on scarcity alone. Recently, we’ve seen some staggering prices being paid for these digital assets, for example, the Beeple’s “Everydays: the First 5000 Days” NFT which sold for $69 million and many other premium NFTs sales like CryptoPunks, Bored Apes etc, as everyone from investors to collectors is eager to profit from this new economy.

With NFTs, it’s not just the monetary value that’s assigned to these digital creations, but also their added protection under property rights laws, similar to those afforded to physical entities. This newfound ability to monetize digital creations has truly changed the game for creators and investors alike, and it’s exciting to see what the future holds for this dynamic market. 

The NFT industry has grown over the years creating a multi-billion dollar industry filled with many innovations. In this article, we shall be exploring why people buy NFTs.

1. The Appeal of NFTs as Collectibles

People are drawn to NFTs because of their uniqueness and scarcity. This makes them highly desirable among collectors who value owning an entirely original work of art or media with limited supply. By owning rare NFT tokens, consumers or collectors can experience exclusive content and support creators directly. The eagerness to own a piece of the new digital assets drives collectors to acquire NFTs sometimes at very high prices. 

2. Investing in NFTs

Investors are banking on NFTs to turn a profit, buying and selling these digital assets like hotcakes. With some artworks reaching millions of dollars in sales, the mainstream spotlight is shining bright on this emerging market. But NFTs are far from just art – we’re seeing unique uses beyond traditional mediums such as ticketing or real estate ownership documents that could mean even greater potential for growth. However, it’s important to note that investing in NFTs comes with significant risk due to its relatively untested nature. Buyers must be careful not to get caught up in the hype and make emotional decisions without fully understanding what they’re purchasing. Otherwise, they could face substantial losses.

3. Supporting Creators with NFTs

NFTs allow creators to monetize their work directly without intermediaries like galleries or record labels. Buying an NFT supports artists and helps them earn income. Blockchain technology through NFT sales platforms has made it possible for independent artists worldwide to market digital artwork in unique ways while protecting ownership rights at reasonable prices. By purchasing a tokenized creation via smart contracts on, for example, Ethereum-based markets, you’re supporting artists and ensuring they get fairly compensated for their hard work. This empowers creatives globally and leads to better creativity outcomes benefiting everyone involved.

4. Speculation on NFTs

Some people buy non-fungible tokens (NFTs) purely for speculative purposes, hoping to sell them for a higher price in the future. This is similar to buying stocks or other assets that are expected to increase in value over time. However, it’s important not to confuse speculation with investment.

While both involve taking risks and expecting returns, investing focuses more on long-term growth potential rather than short-term fluctuations. It remains unclear whether NFT prices will continue increasing or if they’re just another market bubble waiting to burst. Time will tell how this new digital asset class evolves and what role speculation plays in its development.

5. The need to belong 

As in the real world, people buy things not because of direct financial benefits but sometimes the social benefits ownership confers and the access it provides. Similar with NFTs it is, people buy certain NFTs because of the value it can offer them in connecting to other people or enabling them access to some other property of value. For example, the Veefriends NFT grants holders access to Veecon. 

Closing thoughts

NFTs, or non-fungible tokens, are the hottest trend in the digital world. Artwork, music, sports memorabilia, even tweets – anything can be sold as an NFT these days. But why are people shelling out millions for items that are often just copies?

Part of it could be a desire for status. Owning unique items, even if they’re only digital, signals wealth and cultural savvy. Another factor is the emotional attachment to specific artists or creators whose work is admired. Fans hope to support their idols financially while getting closer to them by owning their collectibles.

And let’s not forget about the potential investment opportunities with high returns on the horizon. But tread carefully: market volatility means sudden price drops, making caution essential when investing in this rapidly-evolving market. Don’t dive in without knowing what you’re doing!

Read also: 

Innovative Use Cases of NFTS in 2023

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