NFTs or non-fungible tokens have burst on the scene in recent years. People have been spending significant amounts of money on things like the world’s first tweet or a gift of a space cat. But what makes certain NFTs so desirable?
Digital collectibles become sought after because they are unique. There is only one original of an NFT – anything else is just a copy. And the owner of the NFT is able to verify that this is the one and only of that item with their token or digital certificate. By being non-fungible, it means it is unique and cannot be exchanged with another item. Think of getting an autographed picture from a famous actor that’s signed directly to you – there is only one of them in the world and you have it.
We are moving more and more to a digital world. From digital currency to the metaverse, advances in technology have enabled us to move away from the physical world.
Humans are collectors and collecting on a digital platform is enticing to many. From baseball cards to pokemon cards to priceless art – having a full collection is meaningful to many. So what if you can create those same collections but do it online instead of having to travel halfway around the world in search of an elusive item?
The world of distributed ledger technology has changed the market for digital artwork. In the past, it was not always easy to prove the owner of something that was created and sold digitally. Using a distributed ledger this can now be done which makes that work more desirable. Because records of ownership exist on a distributed ledger, we are able to prove who that rightful owner is and that they have the right to sell the item, easily providing us the provenance of the digital collectible.
Creating communities around digital collectibles adds an emotional component to them as well. Those communities help to build relationships amongst collectors.