Why Are People Buying NFTs and Digital Art?

The recent Google search volume for ‘NFTs’ has surpassed that of cryptocurrencies.’NFT’ is also the current ‘word of the year.’ We’re living in a changing world where technology and culture meet each other often. We should look at NFTs and the blockchain technology powering it, as a new form of digital ownership. Users can trust the blockchain to register ownership of Digital Art.

Cryptocurrencies are well-known for their volatile prices. NFTs are today well-known for visual art, music, social causes, collectibles, and games. The most well-known projects at this moment are CryptoPunks, Bored Ape Yacht Club, and games like Axie Infinity.

2021 has seen a record number of web3 projects capture the imagination of the public. The worldwide NFT trading volume recently surpassed $23 billion, a 230x growth from $100 million in 2020. It is the easiest way to introduce people to blockchain and cryptocurrencies. They have renewed interest in digital art and the ownership of digital media assets.

Why have NFTs become popular?

There are four reasons why NFTs dominated headlines this year and achieved record trading volumes:

1. Consumer brands are using NFTs to drop limited edition digital collectibles. Nike and Adidas are recent examples. Expect more brands to leverage NFTs to drive marketing initiatives in 2022
2. Celebrities and media personalities are exploring NFTs to increase fan engagement and communication
3. NFTs, have given birth to a new digital genre: play-to-earn games
4. Digital art creators and audiences across the globe are interacting directly without any middlemen

Physical Artworks Have Limitations

Works of physical art have come to represent communities around the world. Each of us comes from different social and economic background. We know this from history: different civilizations had their own set of trends, customs, and rituals, which they passed on to their children.

Yet, only the rich and wealthy have been able to get access to physical artworks. Ordinary people could never hope to get their hands on them. This is because they were culturally and financially insignificant. Today, the internet represents culture. Blockchain and NFTs represent economic value. Connecting both things, we have a global 24/7 market for anything people want to create, buy and sell.

Why Digital Art is Different

There is one fundamental difference between physical and digital art.

Physical artworks number only one or a few dozens of original copies. This limits the supply of the artwork, and renders it more valuable to a few owners. But, it restricts the total economic and cultural potential of the artwork. Digital artworks, meanwhile exist as a limited number of data files a.k.a NFTs. They can number anything, depending on their use case. They can be displayed or exchanged on the internet to a global community from day one.  

In a nutshell, we can have more people become artists and more people to buy art, at the same time. This is only possible because of the internet and the blockchain. We are able to transcend geographical and economic barriers at the same time. Something that has never happened in history before. With time, digital art can become more valuable than investments in physical art. We can see this phenomenon all around us. Our digital identities are becoming more valuable than our physical ones.

Today, the global art market is worth $1.7 trillion. Digital artworks have only just begun to get the attention they deserve. This is because it took time for the internet to become relevant as a dominant cultural medium. Digital art has always existed in name since the beginning of the internet. Now, blockchain technology has created a global, 24/7 market.

Why Do People Buy Digital Art?

People buy and sell goods and services for various reasons. In no particular order or combination, they include the below:

1. Increase social status among participants in the new internet of web3
2. Access to unique digital communities, creators and artists
3. As an investment for future monetary returns.
4. Interest in contributing to specific art projects
5. Financial speculation. 

The benefits and advantages of the open internet of web3 are unfolding right before our eyes. Founders and creators are building their dream projects. Users and participants are finding new ways to use them. The world is being reimagined as we speak and think. With time, people will get used to the phenomenon of ‘owning everything on the internet. Digital art represents the beginning of realizing this vision.

Conclusion

There are many ways to understand how blockchain and NFTs work. One of them ought to be how an individual interacts with the digital art world. We’re seeing people coming into Web 3.0, for personal and professional reasons. Many start-ups are making their presence felt across the entire spectrum of applications, right from building NFT marketplaces to wallets.

NFTically is a global B2B Saas hub with customized solutions for enterprises, brands, artists, gamers, and other creators, to build and launch their own NFT marketplaces. The team consists of blockchain developers & business executives who love to solve real-world problems.

For further information, connect with the NFTically team on Discord and Telegram