Doesn’t it sound ridiculous when you hear about people spending millions of dollars on JPEGs?
Yeah, I know it seems so, and the thought of what they stand to gain may have crossed your mind.
Well, they are much more than jpegs.
Let’s go over some of the NFT benefits for buyers and why they are worth it.
What Is An NFT and Why Are People Buying Them?
More than just JPEGs, NFTs are unique digital representations of ownership. You could also picture them as evidence of the originality of a particular item or piece of content.
These NFTs (non-fungible tokens) are securely kept on the Blockchain.
The NFTs ecosystem is quite large, and we see a lot of people rushing to buy certain collections.
What’s the drive behind their radical buying decisions? Or, put plainly, why are NFTs seen as valuable?
While there are various reasons people buy NFTs, these are the most prominent.
- Art Appreciation
- Digital Identity and social status
- Investment opportunities
- Collectability and ownership
- Charitable Causes
- Supporting Creators
- Access to exclusive content
Quite a list, huh?
7 NFT Benefits for Buyers
Okay, now let’s briefly touch on these points to get the full idea of NFT benefits for buyers and why anyone would spend 60 ETH on an NFT.
1. Investment opportunities:
This is probably the most popular NFT benefit for buyers out there. Many people buy NFTs as a form of investment, just as they do in the stock market and with other assets.
They try to project the future value of certain NFTs, and if it proves to have the potential to increase over time, they invest in it so they can sell it at a higher price in the future.
Human nature loves to ‘own’ something—anything rare and exclusive. NFTs present the opportunity for individuals to own and showcase limited-edition or rare items.
It’s just the same way we love to brag about our baseball cards or sticker collections to our friends
Owning certain NFTs can raise an individual’s social status and class. Some buy NFTs to show their wealth and publicly announce that they belong to this class of people. Imagine owning a Bored Ape or CryptoPunk and displaying it as your PFP or at home when friends come around.
It also opens the door to accessing like-minded individuals in the online community of such NFTs. For instance, owning a VeeFriends NFT gives you access to the VeeCon event, where influencers and business people meet up and exchange ideas.
4. Access to Virtual Worlds and Gaming:
The NFT ecosystem also extends to the gaming world. Here, it allows users to trade and own distinct characters, real estate, and other in-game assets.
This is another NFT benefit for buyers as it allows holders to enjoy player-driven economics and ownership in these digital environments.
5. Participate in Charitable Causes:
NFTs have also been used to raise funds for charitable causes. In this system, creators leverage their work to fund certain initiatives.
And the proceeds from the sales are donated to those causes or initiatives.
6. Supporting Creators:
NFTs also help to bring fans closer to the artists, musicians, or creators that they love. When people purchase the NFTs of their favorite artists, they are showing their love and support for such artists.
It is also a medium to appreciate the artist’s talent and creativity and to motivate him or her to do more.
7. Access to Exclusive Content or Experiences:
Some NFTs come with extra benefits. It could be participation in events, free tickets to the VIP arena at a football match, early access to certain releases, exclusive content, or other kinds of unique experiences.
Owning an NFT grants individuals access to these exclusive offerings, creating a sense of exclusivity and privileged engagement.
Do People Actually Make Money Off of NFT?
Yes, people make money from NFTs. There have been many notable sales of NFTs, and some were sold for millions of dollars.
However, it is crucial to note that the NFT market is quite volatile, and the worth of certain NFTs is subject to fluctuation.
There is no guarantee of the value an NFT will hold in the years to come, so it’s imperative to do in-depth research before heading into any NFT purchase.
How Does An NFT Buyer Make Money?
Let’s go over some common ways people have made money off NFTs.
While artists and creators make money from the sale of their NFTs, the buyer also has the opportunity to resell that NFT at a certain price and make some money.
However, it is important to note that the value of an NFT is determined by certain factors, which will play a crucial role when fixing a price to resell your NFTs.
This is quite similar to reselling NFTs; however, in flipping NFTs, the buyer gets more than one NFT from that particular collection to resell them at a higher price.
The goal of NFT flippers is to buy as much as they can when the price is low and then resell (flip) when the price is high for profit.
Some NFT projects build engaged communities around their digital assets. These communities can provide additional revenue opportunities through collaborations, partnerships, or exclusive offerings tied to the NFTs.
Collectors or holders of rare or valuable NFTs may have access to unique experiences, events, or benefits, which can be monetized or leveraged in different ways.
Virtual World Economies:
NFTs have helped to create economic activity in the gaming environment and virtual world. Players can now sell, buy, and trade in-game items or real estate.
Virtual world economies can generate real-world income for individuals who invest time, effort, and resources into these virtual assets
NFTs can be lent out to other users, who will then pay a fee to the lender. This is leverage in the gaming industry, and various gaming guilds have been formed based on it.
Players without the money to buy certain game NFTs can lend it to play the game and then split the rewards they get from it with the original owner.
Some NFTs can be staked, which means that they can be used to earn rewards. These rewards can be in the form of cryptocurrency or other NFTs.
Leveraging IP rights:
Some NFTs, like WoW and BAYC, have granted their holders commercial rights.
And this has opened up new business opportunities for these holders. They can now monetize these NFTs in different ways.
Case Studies: Notable NFT Purchases
In March 2021, an NFT of the first tweet ever sent by Twitter founder Jack Dorsey sold for $2.9 million.
Everydays: The First 5000 Days by Beeple: It is a collage of 5,000 images created by the artist Beeple in 5,000 days. It was sold for 69.3 million in March 2021.
Clock by Pak and Julian Assange: This NFT is a digital clock that updates daily to calculate how long Julian has spent in prison. It was sold for $52.7 million in November 2021. The proceeds from the sale were donated to the Wau Holland Foundation, which supports WikiLeaks.
CryptoPunk #5822 by Larva Labs: This NFT is a CryptoPunk—a collection of 10,000 unique digital characters—and was sold for $23.7 million in March 2021.
As you can see, there are many NFT benefits for buyers. But while the NFT market holds limitless possibilities for buyers, it is important to note that there are risks attached to buying NFTs.
The market is volatile, and the value of certain NFTs can fluctuate wildly. So as always, before heading off into any NFT collection, ensure you do in-depth research to seal your decision.
What kind of person buys an NFT?
NFT buyers are typically digital art collectors, investors, tech enthusiasts, fans of a specific artist or team, or everyday people like you and me. They appreciate uniqueness, see investment potential, support blockchain technology, or seek to innovate in the NFT market.
Can you sell the NFT you bought?
Yes, you can sell the NFT you bought. There are many different NFT marketplaces where you can list your NFT for sale. Some common ones include OpenSea, Rarible, and SuperRare.
Is it hard to resell an NFT?
It depends. the process required to resell an NFT is quite straightforward; however, you should note that the market is still very new and volatile, and the value of NFTs can fluctuate wildly.