Why Do People Buy NFTs?
The speed with which our society accepts brave new economic concepts can change drastically — we saw that with cryptocurrencies. One moment, everything is very slow and only enthusiasts talk about digital money. And the next moment, all skeptics register their crypto wallets, and the prices shoot super high.
Such ups and downs also happen in the area of Non-Fungible Tokens. But jumps between deep skepticism and unhealthy enthusiasm are rather dangerous. Wise investments require calm decisions and proper understanding of why a specific transaction is worth making.
We’ve already described the history of NFT, so it’s time to delve deeper into this topic and figure out why people actually purchase such assets. This might help you make the best personal choice — to buy or not to buy.
Reasons to Buy NFTs
Despite many differences between trader motivations, it is still possible to highlight these four reasons that move people to spend their funds on digital assets.
Ok, let’s get immediately to the point. Most traders invest to earn even more money in the short or long term.
Thanks to their core features, Non-Fungible Tokens are one of the best investment targets right now among various digital items. These core features are:
Uniqueness — every NFT contains info on its owners and price history. This data is written into the blockchain and cannot be changed thanks to the decentralized technology. As time passes by, the uniqueness of limited edition NFTs becomes more tangible. And their price grows respectively.
Artistic aspect — unlike cryptocurrency, NFTs are mainly art-pieces: images, videos, or audio. It’s kind of similar to investing in real art. The price on some paintings reaches hundreds of millions of dollars. Of course, the personality of the artist and general opinion on these specific assets is crucial for making NFT investment profitable.
Proven ownership — it’s the basis for possible revenue. Without this, the uniqueness and artistic aspect are irrelevant.
Even with the current, pretty short period of existence, some NFTs have proven their profitability. So, why not join the party?
Preservation of Values
Let’s take one step deeper into investment philosophy. Making profit from your money is a great idea. But is this profit sufficient to cover inflation?
To be honest, the situations when you buy something for, say, $5 and then the price on this asset grows to $5m, are rare. A big chunk of luck is needed for this to happen. Many traders think about preserving their funds first of all.
The logic here is pretty straightforward. Digital assets are only relatively connected to traditional cash. Therefore, NFTs exist in a dimension beyond inflation. When cash loses its value, unique artistic pieces with proven ownership can hold their own.
Investments for such reasons are a common thing for people with big capital. There are risks for sure. The probability of getting a profit beyond preserving funds is here as well.
Why do people collect art? Yes, they do this to make profit and preserve funds. But also, art allows people to reflect their personality.
We all do this in one way or another. Some people purchase small beautiful figurines for their apartment, and everyone entering the place immediately feels the internal world of the owner. Some people prefer reflecting their style in clothes, CS:GO skins, or the art objects they are collecting.
Many options are available for collectors. Paintings, statues, furniture, action figures, comics, retro games — Where does your personality call you?
The situation with NFTs is the same. We create a digital collection that reflects our internal beauty and our understanding of value.
Thanks to uniqueness and proven ownership, creating NFT collections is as satisfying as doing this in the real world.
Commemorate a Moment
We live in a world of unrepeatable moments. Some of them are rather personal. Others are common to many people — and NFTs help us keep a piece of such moments.
For example, a Non-Fungible Token can be connected to a remarkable esports tournament and a team’s spectacular victory. There are various examples of NFT application in gaming — digital assets commemorate virtual moments.
Events connected to NFTs are very different. Sometimes the very creation of an asset is a worthy moment. Like the NFT “Everydays: the First 5000 Days” that commemorated the completion of a long creative process.
Such moments directly affect profit and fund preservation. Human emotions get monetary value with NFTs.
Having a proper, mindful reason for purchasing an NFT and benefiting from this action — if you can link these things, you’re a good trader. And to develop this skill, it would be wise to examine everything surrounding this specific asset.
- How many NFTs are in this series?
- Who is the artist?
- Who is the previous owner of the asset?
- Are these tokens connected to some art styles, events, people? Are these historical NFTs?
Making your investments in Non-Fungible Tokens is quite an art itself. There is no single universal recipe for success. And the whole deal might be pretty risky. It’s a good idea to learn various NFT use cases to deepen your understanding of this topic and catch the wave of success.
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