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Why people are buying NFTs

After buying an NFT, I was pleasantly surprised when the developer behind these projects airdropped or sent me some more free NFTs. As an owner of a few mid-tier NFT projects, I was also able to mint some potentially valuable NFTS for free.

Why Are NFTs So Expensive? 9 Surprising Reasons

Why Are NFTs So Expensive? 9 Surprising Reasons

I've spent the past few months buying and selling lower-priced NFTs. I wanted to understand how this new content format is shaping the creator economy and learn about higher-priced NFTs making headlines.

Here are a few examples of eye-watering NFT sales:

In October 2021, Gary Vaynerchuk sold five NFT digital artworks as part of his VeeFriends Collection for $1.2 million via Christie's auction house.

Earlier in 2021, Mike Winklemann's (aka Beeple) The First 5000 Days NFT sold for an astonishing $69 million. In February, an NBA Top Shot NFT of LeBron James "Cosmic" Dunk sold for $208,000.

Even lower-priced NFTs or digital collectibles cost several hundred if not thousands of dollars (depending on the price of Ethereum) to acquire on marketplaces like Opensea. But do these JPEG files justify such eye-watering price tags? And why is such a niche type of investment so expensive?

Want to Explore This Trend? Here’s How to Buy an NFT

Why Are People Spending Crazy Amounts on NFTs?

The Capital

According to somewhat recent data presented by CryptoSlam, in a few months to March 2021, people have spent well over a billion dollars on digital assets.

As you probably know, digital arts have been the rave for a while for most crypto enthusiasts, but recently, even people outside the crypto ecosystem have started delving into the trend of NFTs — this sprouted from nowhere. So, this begs the question of what is really attracting more individuals into the NFT mania, making them invest hundreds to thousands to millions of dollars on these assets? Some investors opine that this is triggered by a range of factors that may include the surge in BTC prices or the COVID-19 pandemic.

Just a few months ago, Mike Winkelmann (Beeple), sold crypto art for around 70 million USD. Also, a similar trend can be seen in several other artists like Grimes, which made several million from their cryptic art collection just in a few hours. Besides, the buyers and the creators of this art have also accessed sizable profit from them. In February, Pablo Rodriguez, an art collector from Miami, indicated how profitable the market could be when he resold Mike Winkelmann’s piece for an almost 1000% increase relative to the actual price.

What Do You Get When You Purchase a Non Fungible Token?

Anytime you buy an NFT, you access the rights to an immutable and unique token. However, this is only relevant to the blockchain. Anytime anyone purchases a meme or an image, they can only claim its possession on the blockchain, with no control over its distributional rights. In most scenarios, when you purchase an NFT asset, you’re not purchasing the content; instead, you are purchasing a token that links your identity to the creator’s art on the blockchain.

NFTs work based on the same concept as cryptocurrencies. The main difference is that NFTs, unlike cryptocurrencies, can’t be traded or replaced with one another. Every NFT is different, setting it apart from fungible tokens, such as cryptocurrencies. No one can duplicate them, they are immutable, and as such, you can easily authenticate the authenticity. However, there is no guaranteed approach to identifying whether they can maintain their values as passes. So, what caused this frenzy?

So, Why Are More People Buying NFTs Today?

According to various enthusiasts, this new craze could be attributed to the surged price of BTC as well as the influence of the COVID-19 pandemic, with USD distrust creating a perfect breeding ground. However, it could also be said that more and more people are exploring this space as a result of their awareness of other benefits embedded in it. There are some obvious benefits you can access by investing in NFTs, and as such, these benefits may tempt even the average doe to invest;

Increase in value — this is the fundamental premise for every investment. As highlighted by InvestorTrend, the fundamental reason NFTs tend to surge in value is as a result of their use in blockchain games and the growth in the trend of gamification in DeFi. A good example of this is Black Eye Galaxy, which is a cross-chain blockchain system allowing users to explore the planets and galaxy while earning sizable rewards. It tokenized planters in the form of NFTs, and some of these assets can considerably grow in value as the popularity of the platform keeps rising.

The apparent surge in the NFT ecosystem — As aforementioned, the NFT ecosystem keeps growing, and it’s seeming more likely that their use cases will gain more traction. And as we know it, as they gain more traction, owners of such assets can gain substantial profit from them.

The joy of holding something unique — NFTs are unique in nature, and there’s a special feeling the accompanies owning what others do not. This same premise could be applied to those who purchase limited-edition fashion brands at exorbitant and seemingly unreasonable costs. Besides the joy of holding something unique, they also tend to grow in value, and as such, this ties into the benefits previously highlighted. Essentially, Most people are inclined to purchase NFTs as a result of the unique connection which it births to the creator, which is not in existence for any other art form.

Want to Explore This Trend? Here’s How to Buy an NFT

Before buying an NFT, there are a few questions you should ask and answer; where are you purchasing the NFT from? What is the required cryptographic token? What is the required wallet?

Some NFTs are only available on particular platforms. For instance, suppose you want to purchase lands on a specific planet, Black Eye Galaxy is one project offering that form of NFT. As such, you cannot buy such an art via a platform offering books or other real-life utilities. With that in mind, you’d then check out the token pertinent to such a platform and other requirements. Pretty easy, right?

What Does the Future Hold for NFTs?

By the end of 2021, a few analysts projected that the NFT market could surpass the 1.5 billion USD mark. This feat is expected as more brands, icons, and artists keep leveraging the space to develop their unique identities and tokens. As more and more blockchains are in the competition to create more robust NFT services, and considering the ever-increasing range of platforms you can select from, now is the best time to become an active part of the space. Even as a relatively recent feature in blockchain, NFTs are currently experiencing a big boom and almost everyone is rushing to jump into the craze, especially when it comes to art NFTs.

As time passes, no one could say whether NFT fever will fade out or not. However, those who jumped in early will witness a sizable explosion in their profitability goals within a negligible period. Its popularity is making several creatives to eliminate barriers and come back to develop new and innovative concepts on how to better explore what NFTs have to offer. As such, 2021 is just a starting point of an explosive innovation, and we all should expect diverse use cases for this innovation in the future. Ultimately, NFTs will become an integral part of our daily activities and people will be able to implement them seamlessly.

Disclaimer: This article is not intended to be a source of investment, financial, technical, tax, or legal advice. All of this content is for informational purposes only. Readers should do their own research. The Capital is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by reliance on any information mentioned in this article.

There are also tax concerns as IRS had issued some guidance as to the tax consequences of transactions involving what it calls “virtual currency” or “cryptocurrency” (see Notice 2014-21). An NFT is likely to be considered an intangible asset, like some functional tangible personal property, it might even be said to have a life cycle.

Why NFTs are worthless and I still buy 815k of them

Coinbase's Fred Ehrsam warned that 90% of NFTs will have little to no value in 3 to 5 years. Gary Vee also said that 98% of NFTs in 2021 will be bad investment. Andrew Shirley, editor of The Wealth Report at Knight Frank, said in CNN "It's only a matter of time before NFT artworks will lose their allure to all but a niche group of enthusiasts."

Here's my experience:

I spent 250.83 ETH (around 815,678 USD) excluding transaction fees on 16 World of Women NFTs and it was the most fun use of my crypto. I have no regret even if they went to zero which can easily happen.

Why NFTs become worthless? NFTs are bought mainly for speculation, and prices being pumped by NFT owners. Gartner placed NFT at the peak of its hype cycle in 2021 and price will plateau in 2 to 5 years. Given unlimited supply that an artist could come up to dilute the prices (e.g. Mutant Ape Yacht Club spawning from Bored Ape Yacht Club), prices can only drop on most projects.

Even though Gary Vee said that 98% of NFT will be worthless, he had supported many projects. His point was that through researching and spending time on the projects, he have an edge on what can benefit.

Similar to Gary Vee, Chris Camilio of Dumb Money relied on information imbalance to make his investment. He have also invested into NFTs and was can be found in the Discord of the various NFTs.

I have also start tracking NFT projects and found 25 dying projects with minimal trading volume. You can read more about the dying NFT projects here.

What's the problem with NFTs?

What NFTs really do is create scarcity. When the Kings of Leon released their new album as a $50 NFT, they only made it available in that form for two weeks, essentially making a blockchain powered limited edition.

Many people knew NFTs are nifty-but-worthless pieces of digital art most of the time, but could also be once-in-a-lifetime jackpot item. This is aka to gambling and unlike equity investing whereby the underlying asset has a business regardless of stock price.

In term of the Gartner hype cycle, after the hyper all that is left is the trough of disillusionment before a slight slope of enlightenment and plateau of productivity.

There is also no regulation with NFTs that require you to be wary of scammers and hackers.

  • Hackers just need to steal your private keys to access your collection and transfer them out (Metamask did expose the private key in the Chrome Extension and an influencer got his collection stolen when he was sharing his screen).
  • Scammers can also bid in USDC (which is 3000x lower than ETH) instead of the usual ETH. Someone got confused and sold his Ape at 8 USDC. I also see these bids commonly in my NFTs.
  • Selling fake "clone" in a misspelt collection (e.g. "World of Womenn" instead of "World of Women"). Similar to domain name, the collection name is important and try to ensure you double checked it is verified

There are also tax concerns as IRS had issued some guidance as to the tax consequences of transactions involving what it calls “virtual currency” or “cryptocurrency” (see Notice 2014-21). An NFT is likely to be considered an intangible asset, like some functional tangible personal property, it might even be said to have a life cycle.

Performance of Arts against Stocks

Even if NFTs are deemed as art, the return might not outperform stock in the long term. Based on a Dec 2020 study by Citibank between 1985 to 2020,

  • All arts produced a 8.3% annualized return;
  • Global developed market equity/stock returned more at 9.9%
  • The best was private equity returning 13.8%

What is the difference between a digital asset and an original work?

One other characteristic differentiates NFTs from traditional copies of a work is that an NFT can internally incorporate royalty agreements that allow the artist to share in profits every time the NFT is licensed or resold.

Conclusion

I allocated a portion of my crypto into NFTs because of my silly optimism and conviction to a project. I liked to support an underdog with some edges,

1. This is a joke, right? Why are people paying millions for a digital file? Why wouldn’t you just go to literally anywhere on the Web and download images and gifs for free like everyone else does?

3 Reasons We Hate NFTs — And Why Those Reasons Don’t Matter

A non-fungible token (NFT) is a digital file transacted on a blockchain. Think of NFTs as digital trading cards, art, video clips, text or music, each with an unimpeachable certificate of ownership and authenticity. More than $2 billion worth of NFTs were exchanged in Q1 2021.

NFTs are a strange concept, made stranger by the complexity of the technology involved and the oddness of the subject matter. After the press picked up on NFTs, focusing on the more exorbitant purchases, we started to see a backlash that focused on three primary areas.

1. This is a joke, right? Why are people paying millions for a digital file? Why wouldn’t you just go to literally anywhere on the Web and download images and gifs for free like everyone else does?

The sheer ludicrousness of paying seven figures for a piece of glorified clip art seems instinctively stupid. If the question is, “Why would I buy a NFT a video clip that I could watch for free?” the simple answer is “I don’t know.” But we know that collectors find value in ownership that people outside that community don’t always understand.

Why would you pay for a signed vinyl copy of an album you already have access to on Spotify? NFTs feel broken because they place significant value on something that, practically, has no value at all. But until we’re ready to disregard any other art for the same reason, we can’t disregard NFTs for feeling frivolous.

2. NFTs are environmentally unsustainable. NFT transactions have historically required a distressing amount of energy, and the primary currency used for minting NFTs (Ethereum) is an environmental sinkhole. Fortunately, that’s changing. There are already NFTs being minted on much greener currencies as artists shift to more sustainable platforms.

3. The NFT crowd looks…. terrible You don’t have to be a full-on Marxist to wonder if somebody who spends $17 million for a piece of pixel art instead of, say, donating it to keep kids from starving, has maybe lost perspective.

But it isn’t fair to judge early NFT adopters more harshly than the equivalent debauchery seen from any new technology wave, from bitcoin whales to social media influencers to dotcom frat-boy millionaires. We are better served letting the more “intense” participants flame out, without jettisoning the underlying utility of the technology.

Is there underlying utility in NFTs? While some brands have jumped on NFTs as a publicity stunt, there are broader uses emerging. For example, NFTs might give artists more agency in selling their own work and provide a clever mechanism to track provenance. Beyond art, IBM announced its intention to use NFTs to reinvent how patents are verified and distributed. And, speaking of patents, Nike patented a compelling idea to sell NFTs of sneakers, and allow owners to “breed” different designs together. What if selling NFTs were simply another way of connecting with your most zealous customers?

I bet if we give the underlying technology of NFTs a little time to breathe outside the echo chambers of its own hype, we might find it has some fascinating applications beyond that hype.

In early 2021, CryptoPunks was the only well-known profile pic NFT project. The market was more focused on digital art and NBA sports collectibles. The founders of Bored Ape Yacht Club saw an opportunity.

Support a cause or creator

People might buy NFTs to support a cause or creator they believe in.

In June 2021, every ape holder was able to mint a canine companion NFT for free. The community was able to raise $1M for animal shelters through secondary sales of these Bored Ape Kennel Club NFTs.

Obviously, the status symbol is not unique to the rich. Whether you’re buying a $ 20,000 new car for a $ 7,000 used car, or if Wal-Mart sells the basics for less than $ 5, or buy a $ 30 T-shirt, we’re all somehow happy. I am. What most status symbols have in common is that they have a specific audience in mind.A banker sports his Rolex and the CEO who set foot on her Bentley Don’t worry about what I think either of those purchases is excessive. They have a small but powerful group of people trying to influence. So even with NFT.

Bitcoin billionaire

Here are some simple facts that explain why NFTs are bought for the equivalent of the CEO’s salary.Bitcoin Estimated to have made Over 100,000 millionaires. It’s no wonder that NFTs became a phenomenon in March. At that time, Bitcoin reached $ 60,000, an increase of more than 500% from just six months ago.

Looking at headlines and tweets about the ridiculous amount of money spent on NFTs, it’s easy to get confused about how ridiculous the purchase is. you.. It’s easy to forget that very expensive things are mostly bought exclusively by very wealthy people. And very wealthy people spend a lot on status symbols.

Taken For example, the boring ape yacht club .. This is a collection of 10,000 ape NFTs, all with different characteristics that make them rarer than other NFTs. Rare ones sold for over $ 1 million, while common varieties sold for about $ 200,000. (At the time of launch in April, BAYC developers were selling NFTs for $ 190 each.) BAYC, owned by Steph Curry, Jimmy Fallon and others, is called the “Profile Photo Collection”. The main purpose of the image is to use it as a display photo on Discord, Twitter, Instagram, and elsewhere where most NFT businesses are down.

In summary, a minimum of $ 200,000 for your profile picture.

Alone, it’s insane. But if you put it in the spectrum of how wealthy people spend money, it’s less astonishing. Why spend money when you can right-click and save a JPEG? Well, you can buy a nice home in a safe neighborhood for $ 1 million almost anywhere in the world, yet celebrities get a $ 20 million mansion on a regular basis. You can find fashionable dresses for less than $ 500, but brands like Chanel are building their business by selling dresses for 20 times that amount.

When the green line shot into the sky, up to 100,000 people became millionaires.

We accept rich people to buy luxury items offline. Can’t they even think of buying luxury online?

“How do people bend wealth in the real world?” Said Alex Gedevani, an analyst at cryptocurrency research firm Delphi Digital. “You can also buy a car or watch. How scalable is it compared to buying a CryptoPunk and using it as a profile picture?”

Obviously, the status symbol is not unique to the rich. Whether you’re buying a $ 20,000 new car for a $ 7,000 used car, or if Wal-Mart sells the basics for less than $ 5, or buy a $ 30 T-shirt, we’re all somehow happy. I am. What most status symbols have in common is that they have a specific audience in mind.A banker sports his Rolex and the CEO who set foot on her Bentley Don’t worry about what I think either of those purchases is excessive. They have a small but powerful group of people trying to influence. So even with NFT.

In the case of Richard, he runs his own business, Manifold, helping to show digital artists like Beeple how they can be used. Blockchain Technology for creating art that could only exist as an NFT. Participating in the most popular NFT collections can help in these areas.And when he says his brand is based on his punk, he’s not exaggerating-a group of investors I even named their organization after him..

“Everyone who owns a CryptoPunk believes in a particular thing,” Richerd explained. “You’ve been in the community for a long time, so you believe in what these are, or you’re paying a lot of money to get involved. This shows confidence.

“I want to show my belief. This is one of those projects that lets you put your money where your mouth is.”

Furthermore, other than “photo NFTs” the technology behind NFTs has led to the creation of NFT games like Axie Infinity, which is currently the most popular play-to-earn NFT game globally. Axie Infinity allows players to earn cryptocurrency by playing, and the cryptocurrency they earn can easily be converted to Philippine peso. The digital characters used in this game are NFTs. Thus, players can buy stronger NFT axies for better chances of winning and therefore, higher chances of earning more.

NFTs: Why are people buying jpegs?

Lyca Balita - Onwards

NFTs are selling for millions of pesos. This week, an NFT artist earned around P4 billion after hosting a sale. To buy a collectible NFT from Bored Ape Yacht Club, one of the most popular NFT collections right now, you’d need to spend almost P11 million to own the cheapest, which was once priced at less than P20,000. In the gaming world, several players of NFT games such as Axie Infinity are earning six figures a month.

The NFT industry is undoubtedly very profitable. What does it all mean and why are people buying them?

NFT stands for Non-Fungible Token. Put very simply, an NFT is a digital token that can be owned exclusively by one person, and anyone can check whether that token is an original and whether one actually owns that NFT. The token can represent a digital asset like a photo, video, or an item in an online game. Essentially, exclusive ownership over digital things. If you own an NFT, you exclusively own that digital asset.

For instance, Bored Ape Yacht Club NFTs are represented by digital photos of illustrated apes. It’s initially difficult to comprehend why people would “buy digital photos [or jpegs]” when anyone can right click and save photos for free, but three factors seem to appeal to those who can afford these NFTs: utility, community, and exclusive ownership.

First, utility. As for “photo NFTs,” many collectibles come with real-world utility. Some NFTs entitle owners to exclusive events, international flights, physical items like clothes, and for one project, even access to any Disneyland worldwide. A recently launched collection called Alpha Girl Club, supported by Pia Wurtzbach, allows its NFT holders to have free access to a mental health app, psychotherapists, a chance to win a flight to Japan, and even access to exclusive events like cooking with a Michelin-starred chef. It’s sort of like a membership card to an exclusive community that rewards its holders, so what was once worth P20,000 can be worth millions of pesos in a span of weeks or months. Most “photo NFT” collections that succeed for a long time have this kind of real-world utility that appeals to buyers.

Furthermore, other than “photo NFTs” the technology behind NFTs has led to the creation of NFT games like Axie Infinity, which is currently the most popular play-to-earn NFT game globally. Axie Infinity allows players to earn cryptocurrency by playing, and the cryptocurrency they earn can easily be converted to Philippine peso. The digital characters used in this game are NFTs. Thus, players can buy stronger NFT axies for better chances of winning and therefore, higher chances of earning more.

Second, NFTs appeal because they create communities. NFTs aren’t usually sold alone. They tend to be part of collections, wherein owners of NFTs from a collection become members of an exclusive community of fellow owners. For instance, the Bored Ape Yacht Club collection has holders such as Stephen Curry, Jimmy Fallon, and Mark Cuban, so owning an ape from that collection means the ability to network with these personalities. Being a part of exclusive communities means access to good networks, helpful friends, and even a bigger following.

Lastly, exclusive ownership. NFTs per se, being digital, don’t really have physical-world use unless the project grants utility. But some NFTs are really just collectibles, and collectibles, such as physical paintings or Funko pops, aren’t meant to be useful. They’re meant to be originals, and most of the time, they are status symbols or just something we enjoy owning. Just look at the physical art collection industry. Originals are certainly more valuable than copies, and NFTs have allowed the creation of original and limited digital assets. The NFT world has created huge potential for artists to earn. Many photographers, painters, and digital artists sell NFTs of their photos for six to seven figures in a few months.

NFTs are slowly becoming mainstream, with brands such as Pepsi, Adidas, and even Miss Universe already making their own. We can earn from NFTs by buying them low and selling them high, also called “flipping” NFTs. There are good and bad sides to this flipping culture because it can often end up like a game of hot potato when the projects aren’t made to last, leaving some at a loss with expensive NFTs worth nothing anymore. But NFTs have huge potential when used ethically—good utility, community, and support for artists, without taking advantage of anyone.

It’s a technology that may seem intimidating from afar, but the best way to learn is by actually starting. NFTs come with a high risk, as in all profitable endeavors, and there are certainly many scammers in the space, the same way there are many in industries in the physical world, so it’s essential to do diligent research and to find someone to help you out to enter this industry. FOMO or ‘Fear of Missing Out’ is rampant in the space, so researching projects and the teams behind them is key before shelling out money. Maybe ask: is this project actually good or is it overhyped and susceptible to a pump and dump?

NFTs live on different blockchains, so this is one essential consideration, too. The most popular NFTs are based on Ethereum, which is expensive and currently has earth-friendly issues. But there are other blockchains such as Avalanche, which claim to be cheaper and better for the environment, so they are also something to consider.

Concededly, I initially had my doubts about the industry primarily because of the potentially harmful effects of short-term flipping and pump and dumps, and the environmental damage of some blockchains. But I researched more and learned about the other side: there are projects meant for the long run which build helpful communities and genuinely and financially support causes such as mental health and education, and there are moves to improve the technologies to make them significantly better for the environment. Plus, I’ve seen the lives of good people being changed because of the good side of the industry. The cool thing about this technology is that users decide which practices, projects, and blockchains succeed. If more good people come in, the culture changes for the better. The technology becomes a force for good. Each purchase is really a vote for what kind of future NFTs will have.

The NFT industry is at its early stages, so there are inevitably more changes, improvements, and debates to come, but whether or not we intend to join the industry, learning the technology and the cultures behind it will allow us to understand the market, opportunities, and future of the digital world. Nothing beats doing our own research and deciding independently based on what we learn.

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What is the best website for NFT

Location: San Francisco Category: Video games, metaverse Where to Buy NFTs: 17 Marketplaces and What They Sell On Valuables , an online marketplace for signed tweets recorded and verified on the Ethereum blockchain, Tesla CEO Elon Musk has standing offers of $10,000 or more for several of his Twitter musings, including the evergreen observation: “Was super fun tbh haha.” If that strikes you as surprising — or if you’re baffled by the exploding NFT market, which has seen a digital collage by crypto artist Beeple sell for $69 million at the auction house Christies — you’re not alone. NFT stands for non-fungible token. It’s a digital asset that serves as a secure record of ownership for an item or collection of items, stored on select blockchain ledgers such as Ethereum and Solana. Because NFTs can’t be copied or altered, they are especially suited for tracking ownership of property that can’t be replicated, like the rights to an image or a piece of land, for example. Many peopl