Would you pay 2.9 million dollars to own a screenshot of a tweet?

Probably not if they put it that way. However, that’s pretty much what happened in 2021 when Sina Estavi bought Twitter founder Jack Dorsey's first-ever tweet. The difference though is that he bought it as a non-fungible token.

If you think that’s bizarre, you’re not alone. It doesn’t make a lot of sense that people are willing to shell out so much money for colorful monkeys and pixel punks. And, it can be hard to ask in a space as passionate as the NFT community, but in this article, we’ll ask the tough questions. Why do people pay so much for NFTs? Are they really worth it? Well here are your answers;

Digital Ownership

Let’s take a step back from looking at non-fungible tokens as just digital files. Rather, they are digital files you can own, and that changes everything. Before NFTs, the digital plane was mostly a tangle of creations that no one - or better stated anyone could lay claim to. You couldn’t build a market around something when everyone had a copy. With NFTs, people can prove that they have the original and that it is in fact theirs.

Shiny Object Syndrome

Like moths to a lamp, humans are drawn to things that are scarce or limited, and NFTs leverage that.  The harder it is to get your hands on an item or asset, the greater its worth - at least in our minds. It’s not a fresh concept by any means, many aspects of our society work based on this. Luxury goods are a great example or to bring it closer to home - real estate. Certain locations are super desirable, but there’s not gonna be enough property to go around. That scarcity is a trigger for desire and competition, and it ultimately drives up the property value.

Attaining Cool Kid Status

Social prestige basically, this has close ties to scarcity but it’s not quite the same. We live in a very social environment and our psyche thrives on validation. People purchase NFTs to elevate their social standing, that is to place themselves on the same level as the prominent figures who have joined the space. When these individuals; actors, musicians, businessmen, and athletes show support for NFTs, it’s like a green light, a cool stamp on the industry. The appeal of their exclusivity merges with their allure as a status symbol to make outrageous NFT purchases more than worth it to collectors.

FOMO Takes Center Stage (Fear of Missing Out)

The role of FOMO was never so clear as it was in 2021 when NFTs swept across the globe. Everyone wanted a piece of this new phenomenon because they couldn’t miss out on the next big thing.  The fear of regret looms large and warns against missed opportunities, encouraging listeners to seize the moment, no matter how much it’ll cost. People have joined the NFT bandwagon both as collectors and creators out of a primal need to ensure they make the most of this open door.

The Promise of Returns

Past the emotional involvement, the NFT industry is a great hunting ground for sharp-eyed investors. The general blockchain space has a reputation as the place to make a quick buck, to make a gamble that might yield a large payoff. As you can expect, that attracts quite a crowd. Risk-takers who don’t mind the speculative nature of the market, individuals driven by fervent speculation and the thrill of uncertainty seize the chance to turn a digital masterpiece into a goldmine.

For The Love Of Art

A quick peek through history would reveal that humans have always developed ties to art. People travel and pay to visit museums so they can admire beautiful paintings and sculptures, and they pay even more to own these things. Taking this creative medium of expression to the digital plane does not lessen its ability to evoke emotions in man. Just as a person might like to purchase a physical drawing because it catches their attention, an NFT collector may buy digital art or music they appreciate or that resonates with them.

Conclusion

It’s difficult if not impossible to narrow down why people buy NFTs to a single reason. Their actual motivations are generally a cocktail of the different factors mentioned above. Regarding whether or not it’s worth it, that depends again on many things including why the buyer made the purchase, the state of the market, and the project they choose to buy.

At the end of the day, NFTs have caught and held our attention. Over the past couple of years, they have challenged our perception of value and ownership all the while establishing themselves as a worthwhile industry.  It’s an evolving space, full of exciting possibilities as the boundaries of blockchain technology expand further. Many across the globe have followed the journey and they are certainly hungry for more.

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