Why Do People Buy NFTs?

If you’ve been keeping up with the news, you may have heard of NFTs — short for “non-fungible tokens.” These are intangible assets that have recently become a lot more popular.

Some people see them as investment opportunities, while others just want to own unique digital versions of art or other rare collectibles. But what’s so appealing about something that’s so abstract?

So, let’s discuss the reasons why people buy NFTs. By the end of this article, you should have a basic idea of what makes NFT, and how to get started in the NFTs industry.

What are NFTs?

In layman’s terms, Non-Fungible Tokens (NFTs) are a digital representation of unique assets that cannot be replicated, unlike a fungible counterpart. 

The word “fungible” means that something can be easily exchanged for another thing or replaced by another of equal value. For example, if you have $100 in cash in your wallet and I trade you some smaller bills worth $100 to swap with, we both still have $100 but in different forms—but with the same value.

This exchange is fair and equal because we are exchanging exactly the same amount of money. In contrast, if I give you a single dollar bill from my pile of cash, it doesn’t matter how many dollars are left in my stack — that one dollar bill is worth exactly as much as any other dollar bill in circulation.

Non-fungible tokens (NFTs), on the other hand, are unique objects that are not interchangeable with each other.

They may represent ownership over a physical object (such as land or artwork at most) or even digital assets like game characters or game items and more. 

Here you can learn more about what NFTs are.

Why do people buy NFTs?

First thing first, the reason anything is valuable is because people say it is. As long as people believe something is valuable, it has value. Money, for example, the value of money depends on the people using it, without whom it would just be a piece of paper.

The same phenomenon occurs with NFTs. Although the market has seen some serious ups and downs, many people are still interested in buying Non-Fungible Tokens, and there are varying reasons why they do so.

Let’s take a look at some of the most common incentives behind this industry. 

Investment Potential

Some NFT owners are less interested in owning a unique collectible and are more interested in having an asset that will increase in value. These people, often called NFT flippers, treat NFTs as an investment—much like traditional art. 

They buy low and sell high to make a profit. It is all part of their strategy, so they will be the first to get their hands on a highly sought-after NFT. 

For example, one of many well-known “Flippers” called Keyboard Monkey bought the complete set of Series 0-5 from Deafbeef’s collection for about 110 ETH. Later, he sold it for 2275 ETH. What a massive number! Besides this massive sale, he also sold Autoglyph #336 in Opensea.io for 384 ETH from 150 ETH. Another profit!

Jump over here to learn more about What is Opensea.

Collectible Arts 

Some collectors are motivated by profit, whereas others enjoy a historical piece or an item that’s simply cool and interesting.

There are many NFTs that are extremely rare, which makes them more desirable to collectors who want something unique and different from others. These rare items may also appreciate over time due to their scarcity and popularity.

A survey from civic science shows that 41% of people who bought NFTs did not expect them to grow in value. This indicates that most people buy NFTs for the sake of appreciating their uniqueness, rather than as a financial investment.

Become a part of an exclusive community

Owning NFTs is more than just owning digital assets. You get to discover exclusive projects and items only certain members hold, which gives you bragging rights.

For example, if you buy one of the famous non-fungible token projects called BYAC (a.k.a. the Bored Ape Yacht Club), you’ll get access to exclusive events and parties organized by them.

This is one of many examples of communities in which celebrities, artists, or any other famous and exclusive people who own the Bored Ape NFTs join together to engage in events or parties.

Reading more: What Drives Value to NFT Projects?

What to look before buying NFTs?

Before you spend money on NFTs, it is important to consider a few things. The following are some of the most important questions to help you narrow down your options:

How much do I plan to invest?

For beginners, it’s best to start small. Don’t invest too much money in a single NFT or an asset. You could lose everything if something goes wrong. 

It’s very important for you to familiarise yourself with the NFT market and how it works, as well as understand how to manage it for your own sake.

Check out these related topics: Crypto Investing and Mental Health.

What do I want to buy?

There are many different types of NFTs available on the market today. Some are digital collectibles and others are digital artworks.

When deciding on which type of NFTs to buy, it is important that you know what you want from them, so that you don’t end up with something that doesn’t meet your expectations or requirements.

Here’s a list of some NFT marketplaces you might want to start with: Nifty Gateway, Opensea.io, Rarible, and more. 

Here you can read about what is opensea.

Is it trustworthy or not?

If someone is selling an NFT, then they should also be trustworthy. You can check the reputation for any seller by looking at their whitepaper, socials, or website. Make sure that whoever you’re dealing with has a good reputation and doesn’t commit fraud or scam people out of their money or assets.

These topics might help you: What to Look for When Buying an NFT?

How to Buy NFT?

Once you’ve mastered the basics, now it’s time to start looking for NFT to buy. 

Step 1. Set up your wallet

First things first, you will want to set up a non-fungible token (NFT) wallet where you can store and manage your NFTs and cryptocurrencies. MetaMask is an example of an NFT wallet you can use.

They have a browser extension and mobile app that allows you to interact with the Ethereum blockchain in your browser without having to mine or buy cryptocurrency. 

To get started, download MetaMask from the Chrome Web. Once downloaded, open the extension and click “create new account.” This will take you through a process of setting up an identity on MetaMask’s servers, which will be used to sign transactions on their network. 

Deep dive to: How to Set Up Metamask Wallet?

Step 2. Go to NFT Marketplaces

Let’s use the NFT marketplace Opensea.io as an example. It is one of the most popular decentralised marketplaces for trading digital collectibles and claims to provide a secure environment for buying, selling and trading NFTs.

Once you connect your MetaMask wallet to the site, you can find your favorite NFTs and start buying and even selling them in just a few clicks.

Looking to: Buy and Sell NFTs in OpenSea.

Step 3. Add funds to your crypto wallet

Now that you’ve got your OpenSea account set up, the next step is to add crypto funds to your wallet.

You can easily add funds with your local currency, and we’ll send the crypto fund directly to your Metamask wallet address — with Easy Crypto.

Follow the steps below to transfer funds to your Metamask wallet with Easy Crypto.

1. Sign in to your Easy Crypto Account.

If you’re a new user — welcome! Click on the Sign-up button to create an account and proceed with the account verification process.

2. Select the cryptocurrency you want to buy.

When you want to select the crypto asset. Come to the homepage and select the cryptocurrency you want to buy and enter the amount that you want to spend.

3. Enter your wallet receiving address.

Once you’ve finished choosing your crypto asset, enter your Metamask wallet’s receiving address for the corresponding cryptocurrency you want to purchase. 

4. Select your preferred payment method.

Choose the payment method that you prefer from our selection of payment options. 

If you’d like to learn more about related topics, visit our Learning Hub.