NFTs aren’t a new technology,, however they’ve certainly taken off recently. If you’re questioning what all the hype’s about, here’s why.
Catapulted into the mainstream focus via superstar virtual artwork auctions co-signed by the likes of Grimes, Paris Hilton and Lindsay Lohan, NFTs are also referred to as ‘non-fungible tokens’. This basically way they act as ‘receipts’ or ‘certificates’ that constitute an artist’s or buyer’s possession of a virtual asset – which can be anything from artwork, music, collectibles, video games, digital properties, or even virtual pets. The tokens legitimize and authenticate the authentic virtual product with cryptocurrencies and blockchain technology. But why are they really so ‘huge’?
1. Exclusivity
Just like with uncommon antiques and artwork, there’s something in humans psychology that makes us chase after the ‘authentic’…and show that to other people. If you ever chased after the rarest Pokémon cards, you’ll recognise precisely why. NFTs take this to another level in the online world, where assets and information are usually instantly shareable and replicable. This means that owning the first of anything, which nobody can fake, is a truly appealing thing. Suddenly, there’s massive value in owning a viral video, or a celebrity’s artwork, even if a million copies have already been distributed – because you can own the real original.
2. A virtual piece of real estate
Many people have been saying that NFTs represent ‘virtual real estate’ – it’s like owning your own piece of the internet. You may not be able to hang up an NFT on your wall, but you can let your online following know about it. In the same way that a physical art collection might decorate your home and act as an signifier of your interests, wealth and personality, so too can NFTs showcase your personality in the virtual world.
3. Money!
As you’ve seen in the headlines, NFTs are selling for hundreds of thousands – even millions – of dollars. There seems to be no limit on their value, with some of the strangest NFTs (we’re talking GIFs and cat memes) fetching millions of dollars at auction. This is brilliant news for digital creators, who can earn piles of cash for their work, while still sharing it with the wider world and gaining recognition. This boost in popularity has been welcomed by collectors, and investors, too – in a similar fashion to rare artworks, the value of digital collectibles and artworks will appreciate, making it an attractive way of investing in the digital realm.
4. Convenience
Involvement in NFTs is not restricted to the super-wealthy – they are accessible to anybody, all over the world. Being part of an international online community means that NFT nuts can source, buy and own whatever they please, digitally, without having to ship physical items around the world. The nature of NFTs means that buyers can find rare one-off items with ease, from anywhere on the planet, without the hassle of exchanging foreign currencies or paying for overseas shipping.
5. They’re invincible
While disasters such as flooding or fires can damage high-priced collectors items in the physical world, valuable digital assets are immune to such acts of God, and as such they are a more sensible investment. In this sense, collecting NFTs is a safer bet – they’re durable, long-lasting and less vulnerable to theft, if you keep your digital presence secure.