While there are myriad reasons for people to buy NFTs, the primary ones are – investment and pleasure. Some people buy them to meet their passion by collecting memorabilia of artists or musicians they adore. Others consider NFTs as a great asset for long-term investment. In this article, we delve into various reasons why people buy NFTs. Let’s get started.
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What sets apart NFTs from other JPEGs?
NFTs, which are assets stored on a blockchain, grant digital ownership rights to the owner. They are proof of authentication and no one can claim the ownership title. They guarantee certificates of originality and authenticity.
While you can create countless copies of a JPEG file, an NFT is unique. It is a JPEG file, often an image that goes through a process known as minting and gets stored on the blockchain. That makes it secure, tamper-proof, and unique. While NFT rights management is nascent, it could pave the way for the entire era of digital ownership.
Why do people buy NFTs?
Access to exclusive perks
NFTs serve as proof of digital ownership and authentication for the creators and owners. The owners enjoy special privileges by owning the NFT which others are not eligible for. Some of the perks that NFTs offer their owners include entry to certain online forums and exclusive early access to future NFT collections.
Preserving Value
NFTs are the digital storehouses of capital that are unaffected by factors like inflation, unlike traditional currencies. While they offer a relatively stable and safer investment option, some experts opine that they aren’t so reliable and that most NFTs could lose up to 90% of their value in the near future.
Secure digital ownership and rights
NFTs are digital assets stored on the blockchain network that grant ownership title and verification to owners. Each NFT is tracked and verified on the blockchain, making it impossible to forge. This feature of NFTs is useful when safeguarding digital rights, such as dealing with real estate.
Reaping profits
NFTs are often seen as a great investment opportunity, due to their unique characteristics. They are much more valuable than any of the cryptocurrencies that they are bought with. Furthermore, the price of NFT is not impacted by market trend indicators and is not determined by technical or fundamental analysis. In fact, their value solely depends on their demand and what a buyer is willing to pay for them.
Final thoughts
While some feel that people who buy NFTs pursue strange hobbies , the reality is that it depends on the purpose that it intends to serve. Some people buy NFTs as an investment option believing that their value will appreciate over time and that they can reap profits by selling them. Others use it to secure their digital ownership rights while dealing with physical assets, real estate, collectibles, etc.
The NFT industry is constantly evolving, bringing in newer audiences and artists. The boom is expected to rise and shows no signs of slowing down. However, like any other investment asset, make sure you do thorough research before embarking on an NFT project.
