There’s much more to non-fungible tokens (NFTs) than digital art that looks like JPEGS. But why do people buy NFTs?
Regardless of the crypto and NFT market being down, people still hope to become rich off this digital art. Or, at least, enjoy having access to unique art and media files, physical or digital goods, metaverses, communities and more.
So, here are the biggest perks for buying NFTs.
Reasons for Buying NFTs
First and foremost, to understand these digital assets, it’s essential to comprehend that NFTs are not glorified JPEGs. I repeat – NFTS ARE NOT GLORIFIED JPEGS. In fact, there’s a lot more to these digital artworks than you would initially think.
So, let’s tuck into the reasons for considering purchasing NFTs.
Ownership and Originality
One of the most significant advantages regarding “Why do people buy NFTs?” is that NFTs are held on the blockchain, which enables the digital assets to authenticate publicly without a third party. Thus, the tokens are unique and serve as a digital signature for certifying ownership.
Another plus side is that they are “non-fungible”. Thus, impossible to be exchanged for or equal to another. Each is like no other in its attributes, and its token has no intrinsic value—there’s no measure of what it is worth.
Following this, they have numerous potential use cases. For instance, you can use an NFT to represent ownership to rights over an object—like a concert ticket—but (unlike in the physical world) with few risks.
Fractionalized NFTs mean that you can own a share of the NFT pie. Like holding shares of a company, fractionalization opens up NFTs to investors.
One of the main advantages of fractionalized NFTs is smart contracts, which create a specific amount of ownership tokens along with the original NFTs. The tokens then offer a share in the ownership of the digital assets to each token holder. However, anyone can trade or exchange their fractional tokens on secondary marketplaces.
Related Content: Fractionalized Ownership Will Drive the Next Waves of NFTs
Use Cases for Numerous Sectors
NFTs have many use cases. Some of the most popular applications of non-fungible tokens today affect different sectors:
- Gaming: NFTs are frequently used for decentralized gaming platforms to boost player experience by adding ownership of items or in-game assets. Players typically earn these items when winning the games or by entering difficult sections.
- Event tickets: NFTs can be used as event tickets to eliminate the need for intermediaries. Check out the ticket-gating apps Groovoo and TokenProof, for instance. Both applications allow wallet holders to quickly authenticate the ownership of NFTs before allowing access to real-world events.
- Real estate: Some people are crazily purchasing NFTs in exchange for physical homes. Check out how this NFT house sold for $175k, for example.
- Digital art: Before NFTs, you could only identify the authenticity of art as physical objects. Now, people can own digital art registered as theirs that you cannot duplicate.
- Security: Additionally, it’s much harder for NFTs to be destroyed or damaged than traditional assets due to being run by a decentralized network of computers.
- and so much more. The use cases are limitless.
Investors commonly use NFTs. However, they must educate themselves about where to buy NFTs, the project’s creators, how to verify ownership, ways to keep their wallets secure, etc. Therefore, you must check the marketplaces’ security protocols, research NFT curators, be wary of giving out private information, check previous transactions, and check rarity tools to see the rareness of an NFT and whether or not it’s useful for investment reasons.
The rarity of NFTs is why some digital assets sell for millions while others sell for not a lot. The rarer the NFT, the more desirable; therefore, it becomes more expensive. Check out these top 5 most costly CryptoPunks and why, for instance. The Punks are some of the rarest out of the collection.
Why People Purchase NFTs – In a Nutshell
In a nutshell, to answer the frequently raised question, “Why do people buy NFTs?”, NFTs have undoubtedly revolutionized how the ownership of assets works. You can purchase digital assets in the blockchain and get proof of ownership. The beauty of doing so includes owning something only you own and have access to, issued directly from the creator. The assets eliminate centralized parties and increase the security of ownership. Not forgetting, the rarer they are, the better for investment reasons.
People also enjoy having access to unique art and media files, physical or digital goods, metaverses, communities and more—all of which NFTs offer. The digital assets can open the doors to whatever the curator wants it to.
So, be sure to watch for NFTs as these assets continuously unlock new use cases and advantages.
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