Why Would Anyone Buy a NFT – a simple guide to those wondering why anyone would wanna spend so much money on some digital pictures?
Are you baffled about the fact that people are spending billions of dollars on NFTs? Like many other individuals, you may also think that you can simply take a screenshot of an NFT rather than buy it. But is it really the same thing?
Don’t think more about it, as we will clear all your confusion regarding the value and legitimacy of an NFT. Here, we will answer questions like, is NFT art a scam? Or how do I know if NFT project is legit?
So, let’s just get started.
What Is the Point of Owning An NFT?
To understand the importance of buying and owning an NFT, we first need to know how the NFT mechanism works. If you are an art lover, you will surely know about famous paintings being put at auctions and being sold for sky-high prices.
Why would anyone pay such a handsome amount for a mere painting? There are two possible reasons:
- Number one is that the person is an art lover and wants to own an art masterpiece.
- Number two is that they are buying the painting to sell it later at a higher price.
These two points mentioned above are sufficient to answer why people spend millions on NFTs. They are art fans who want to put their name on an art that has touched their hearts. Or they are the investors who are purchasing NFTs now because they think that these non-fungible tokens will have much more value in the future.
There is a simple logic to understand here. Over the past few months, you must have heard about hundreds of NFTs being sold at unbelievable prices. Moreover, there are thousands of NFTs being sold at attractive prices every day.
Surely, there aren’t that many art lovers to buy all these NFTs. To be more precise, the dominant majority of NFT buyers are investors who consider it a valuable future asset.
When You Buy An NFT Do You Own the Image?
Here is another common question about NFTs: what do you actually own when purchasing an NFT? A common misperception is that the buyer owns the work and the copyrights of the NFT.
I am sure that it will be quite surprising for you, but an NFT purchaser only owns the metadata. The person doesn’t own the original artwork, credits, or copyrights.
Let’s take an example for a better understanding. Suppose that you bought a Bored Ape NFT. Now, the Ape is yours, but the intellectual property isn’t. The intellectual property and copyrights still belong to the Bored Ape Yacht Club creators.
Therefore, if you consider buying an NFT, ponder this aspect. Moreover, if you want to learn how to create an NFT, get started here.
Do NFTs Go Up In Value?
The obvious answer to this question is Yes. If NFTs’ prices didn’t increase, investors wouldn’t have been putting their money in them. But the more important question is, what causes their value to rise? Let’s dig deep into it.
All the NFTs are minted on their respective cryptocurrency Blockchain. Minting is the chore of putting the NFT on Blockchain so it can be sold. Moreover, the buying and selling process of non-fungible-tokens is carried out using that same cryptocurrency.
So, the value of NFTs directly depends upon the price of the cryptocurrency on which they are minted. Hence, if you are considering buying an NFT, you should also keep an eye on the value of its respective cryptocurrency.
The second and the more important prospect is the demand and supply principle. Just like cryptos, NFTs’ value is also governed by their demand and supply relation. Concerning this principle, the value of an NFT can rise in the following two cases:
- More of the audience gets interested in that type of NFT, so there is high demand.
- The supply of those NFTs gets limited, leading to increased prices.
Can NFT Be Scammed?
First, let’s find out what is a NFT scam? NFT scams can be of many types. You can find complete details about them here. Anyways, the most common NFT scams are; the NFT creators collecting money and getting out of reach (Rug Pull) or NFT traders selling plagiarised art. When dealing with NFTs, you need to avoid both types of scams.
First thing first, to avoid the Rug Pull scam, always thoroughly check the NFT official site and all social media accounts. If they contain casual and unprofessional mistakes, then the NFT is probably a scam.
Whereas, to ensure that you are not buying any plagiarised NFT, you need to scrutinize them through a reliable fake NFT checker. Here’s one of them.
- Are NFTs a scam, or could they possibly have value with future developments?
Not all NFTs are a scam. If you buy the legitimate one, it can surely go up.
- I bought a fake NFT on OpenSea; what can I do?
OpenSea offers support services for reporting frauds. You can simply reach them to report the issue.
- Can I buy NFTs using USD?
A very few NFT marketplaces accept USD payment for NFTs. But, generally, you can only buy NFTs using digital currency.
Summarising the whole story, NFTs are a huge prospect as the world moves briskly towards digitization. They are just not art that interests art lovers but an investment with a humongous earning potential. Long story short, NFTs can surely go up in price if you buy the right one.
This blog has told you why NFTs are important monetarily and what you actually own when you buy an NFT. We also tried to help you understanding NFT investing. If you are eager to get into NFTs, we wish you all the best!