Why do people buy NFTs?
From an outsider, NFTs definitely seem like a foreign concept that makes no sense. Why would anyone pay any sum of money for a simple JPEG file that they can download online? Why would anyone in the right mind spend money on something like that?
To an insider, the idea seems obvious, but to an outsider, it is expressed accordingly. See this tweet as an example.
Most people think it’s absurd to pay a few hundred dollars for an NFT, let alone 11.8 Million USD for one.
Digital Ownership is a concept that has not really caught on to mainstream yet, (although it has made a few dents), but going towards the future, it seems to have some signs of further adoption and acceptance. This is seen with the recent twitter profile changes of celebrity Jay-Z with his CryptoPunk Profile Picture, and Mike Tyson with his Cool Cats Profile Picture.
As more celebrities talk about NFT projects, I think mainstream still start to turn attention to them, and soon enough, maybe the idea of digital ownership won’t be such a foreign concept in the masses!
Types of NFT Buyers
So, how many types of NFT buyers are there?
Probably countless, but for simplicity’s sake, I’ve categorized them into 4 main categories. These categories may overlap, or some buyer may not even be in any of these categories. However, these seem to be the most recurring patterns I’ve seen so far.
The OG Collector
The OG Collector recognizes the upbringing of NFTs and pays homage to the OG projects (most notably, CryptoPunks, MoonCats, and CryptoCats). They collect much less of any other NFT (although I do admit it’s hard to not ape into some promising projects sometimes), and only play with the OGs. They buy into these projects because of the History and the Art. Having a part of the start of the NFT revolution (which is just getting started, 4 years after they were conceived) is important to them, and they consider these projects the most valuable.
The Art Collector
The Art Collector collects rare, most of the times limited pieces of art made by famous crypto-artists such as Beeple, Josie, Justin Aversano, Chi Modu and more. They are happy with owning these rare art pieces and acknowledge the illiquid state of their NFTs. They love the art, and are willing pay for it.
The Speculative NFT Buyer
The Speculative NFT Buyer purchases almost every project’s minting if they come upon them in hopes of making it big. They will mint new projects, sometimes in numerous amounts in hopes to be on of the early purchasers of an upcoming project that will 10x, 20x, or even 50x! They have abnormally high risk tolerance. They lose a lot, but when they gain, it makes it all worth it when they find that hidden gem.
Think that’s not possible? Think again! The floor has went up 40x in 7 days!
The Project Lover
The Project Lover has found his place in the community of an NFT project, and they are active in their community, some just like to chat, some share ideas on how to grow their favorite project, and some even commit to creating organizations or DAOs for their project in order to advance it further. Their ETH was well-spent on purchasing a part of that project. They are the most proud form of community members of their projects. CryptoPunks, Meebits, BAYC (Bored Ape Yacht Club), and Cool Cats are project with notably the most Project Lovers out there. Meebits’ community even going ahead and creating their own Meebits DAO!
The NFT Gamer
The NFT Gamer invests in NFT Game projects. Most notable Game NFT projects that have ever existed are CryptoKitties, Axie Infinity, The Sandbox, Decentraland, and more! The NFT Gaming space is just getting started, a long time haulted with difficult gas prices in the past, they are now getting fixed by second-layer protocols and look like they have a bright future! Most notable Game investments are land pieces (estates) in their respective lands, assets (such as axies and cryptokitties) that are used to generate income, and accessories (cosmetics) for their respective games. They are game fnatics and believe a bright future for their game projects that they are investing in.
Obviously, that’s not all the types of NFT buyers out there, and maybe you are more than one of the types, or none! These are just a few examples of what to expect out there.
