Why do people buy NFTs and are they profitable nowadays?

In the last couple of years, one of the most common questions, not only within the crypto community but also in the business world, is – why do people buy NFT, and are NFT really profitable? What are the reasons why a large number of enthusiasts and those who want steady profits decide to invest in NFTs?

First, the craze for NFTs, i.e., non-fungible tokens as their full name is, is very common because many have recognized them as an excellent opportunity to invest and earn money. Those who wonder why people buy NFTs should understand their enormous potential.

We have seen examples of NFTs that have sold for several million dollars. An increasing number of celebrities and brands started creating their non-fungible tokens because they saw a great opportunity to make money and eliminate any middlemen between them and customers.

But, before we move to reasons people buy NFTs, let’s see what NFTs are in the first place, shall we?

What are NFTs exactly?

NFTs, or non-fungible tokens, represent cryptographic assets on Blockchain technology with metadata that distinguishes one nft from another and unique identification codes. They cannot be replicated, unlike cryptocurrencies that are fungible and identical to each other. Non-Fungible Tokens refer to real-world items such as real estate or artwork.

Their function is, among other things, to represent property rights, individual entities, and much more. Typically, they contain references to digital files such as videos, audio, photos, GIFs, memes, tweets, etc.

Since the ownership of the famous NFT is recorded in a Blockchain, its owner can transfer it, allowing it to be traded and sold. NFTs generally provide proof of ownership and a public certificate of authenticity. Let’s get down to its origins for those still wondering why people buy NFTs, shall we?

Evolution of NFTs

Non-Fungible Tokens evolved from the famous ERC-721 standard. The first-ever NFT was developed by Anil Dash and Kevin McCoy in 2014 and called “Quantum,” representing a video file made by McCoy’s wife. It was registered on the well-known Namecoin and sold for 4 dollars in New York City.

After the Ethereum blockchain launch in 2015, the first NFT project was demonstrated, “Etheria .” For more than five years, NFTs from the Etheria project remained unsold until March 2021, when the interest for it was renewed. Within just 24 hours in March 2021, these NFTs from the Etheria project were sold for $1.4 million.

The wider usage of the term “NFT” was achieved with the ERC-721 standard in 2017 via the famous Ethereum GitHub. Several major NFT projects were launched that same year, including Curio Cards, Crypto Punks, and extremely rare Pepe Cards.

CryptoKitties – a profitable online game with tradable cat NFTs

An online game, CryptoKitties, appeared in 2017 and became worldwide famous for its profitability by selling tradable cat NFTs. Its major success brought huge interest and public attention to NFTs. So, those wondering “Why do people buy NFTs” could search for the answer in this major success story from 2017.

It’s, without a doubt, among the most popular online games that were developed on the Ethereum blockchain by

Dapper Labs, the famous Canadian studio. Players can buy, breed, collect, and sell virtual cats.

The huge growth of the NFT market in 2020 and 2021

During the pandemic of covid-19 in 2020, the NFT market experienced huge and rapid growth. Its total value tripled to an incredible $250 million! The world has gone completely crazy for these phenomenal Non-Fungible Tokens, seeing in them a huge potential for investing and earning!

The famous U.S Patent and Trademark Office 2020 got three trademark apps for non-fungible tokens. One year later, in 2021, that number jumped to 1200 and more! Until January 2022, the same office got 450 trademark apps related to Non-Fungible Tokens. Brands that were trademarked for Non-Fungible tokens until today include the following list:

• Elvis Presley
• Walmart
• Yahoo
• Sports Illustrated
• NYSE
• Ticketmaster
• Panera

In early 2021, we witnessed a huge growth in interest in NFTs after various high-profile sales and art auctions. During the first trimester of 2021, more than $200 million were spent on NFTs in general. So, why do people want to buy NFTs? What is the main reason for that?

The main reasons why people buy NFTs

From the brief history described above, we see how NFT developed and the huge interest and price increase. Given that it is a trend that does not subside, on the contrary, we can already assume how popular and profitable it is to invest in good Non-Fungible Tokens.

And for all those who are still troubled by the question “Why do people buy NFTs,” here are the main reasons why:

Great chance for profits

People invest in NFTs simply because they are a great chance to earn profits. However, it is crucial to do good research and be wise to recognize NFTs that can potentially increase in price in the future. They are a great investment opportunity since their unique characteristics cannot be divided.

Not all NFTs are profitable, and not all are unprofitable. This cannot be generalized, but one must know the NFT market well to recognize which NFT can be a real jackpot. In general, those looking for profit-making should understand that their value depends on demand and how much someone wants to pay.

Securing digital ownership and rights

Another important reason why people buy NFTs is that they want to secure their exclusive ownership and rights. Non-Fungible Tokens are generally a great and secure way to verify digital ownership. Every individual NFT is verified and tracked on a decentralized Blockchain. That’s why it’s nearly impossible to steal or forge them.

Since they are almost impossible to steal or forge, they are ideal for securing digital ownership and rights, especially regarding physical assets such as real estate.

Preserving value

Besides making profits and securing digital ownership and rights, people invest in NFTs to preserve value. These popular Non-Fungible Tokens can be considered digital stores of capital since they have the great ability to preserve value.

Unlike traditional cryptocurrencies, Non-Fungible Tokens aren’t subject to inflation. Some NFTs can offer stable and safe investment options. Even though it isn’t the case in 100% of events, some experts claim that the majority of NFT offerings are able to lose their value up to 90% in the near future.

Access to exclusive perks

One of the major benefits of Non-Fungible Tokens is that they’re known to confer holders’ exclusive ownership. In other words, users can own digital assets that aren’t available to anyone else, and owners can get access to specific perks.

Some of the most popular perks among NFT enthusiasts are early access to upcoming NFT collections and exclusive online forums.

Supporting their favorite artists

Believe it or not, one of the main reasons for buying NFTs isn’t because people want to make a profit or have access to exclusive perks. It’s because, in that way, they want to support their favorite artists. NFTs are great pieces of digital art that exclude the need for any intermediaries.

By purchasing NFTs of their favorite artists, fans support their art and enable them to earn from their digital artwork properly. It is certainly a great way for artists to connect directly with their fan base.

For fun

If all these reasons mentioned above are not enough to answer a popular question, “Why do people buy NFTs” there are also other reasons. One is that people buy NFTs for fun, i.e., gaming.

There are a lot of motivated gamers who are heavily interested in Non-Fungible Tokens from their favorite blockchain-based games. In these types of games, NFTs could represent almost anything, from crafting materials, skins, and trading cards, to characters, virtual real estate, and potions.

Some games even require gamers to purchase NFTs before they can play, while others are free to play, but then you can purchase or earn NFTs as part of the game. The main reason gamers buy NFTs is because they are eager to own a piece of the game.

They are happy to know that they are able to sell or trade their NFTs with other players while enjoying earning in-game currency that has real-world value!

Is investing in NFTs profitable or not?

Besides the main question of why people buy NFTs, another one is “Is investing in NFTs really profitable or not.” The short answer to the question regarding NFT profitability is it depends on the NFT you are willing to invest in. Remember that a particular NFT has value since the buyer and their community truly believe it has a certain value. Everything is based on community hype and demand for certain NFTs. Undoubtedly, Non-Fungible Tokens are emerging technology that, as time passes, could gain more of their character based on various factors such as how they’ve used that particular NFT and who has owned it.

It is a risky investment, without a doubt. However, so far, NFTs have proven to be constantly profitable as an investment option. Knowing which NFTs are worth your attention and which are not is crucial. Therefore, if luck, experience, and intuition serve you in the NFT market, you can expect excellent earnings from these fantastic non-fungible tokens! Good luck with that!