For centuries people have collected things. Some of these things can be nostalgic items like ticket stubs or lucky coins. Others may be particularly rare items, such as classic cars or limited-edition vintage watches.
In many ways, the objects we collect become a reflection of who we are. Whether it’s physical objects we hold in our hands, experiences we remember, or digital artifacts we admire on a screen, the objects we collect reflect us.
Often we end up having deep attachments to the more unique objects we collect at different stages of our lives.
Scarcity Generates Value
When things are rare, only a very limited number of people in the world can own them. This exclusivity often makes them very attractive to potential collectors. As a result, high demand for these limited items usually results in higher prices.
This relationship between rarity and price drives much of the collectibles market. Rare items, whether they’re pristine trading cards from a player’s rookie year or masterpieces of modern art, are just plain hard to come by. For this reason, people are willing to pay a premium to own them.
The market for limited-edition toys, stamps and artwork is worth more than $300 billion, says a UnivDatos Markets Insights Report. But even those numbers pale in comparison to the potential of a relatively new form of collectibles.Non-fungible tokens (NFT) represent the next generation of collectibles. These digital tokens have already started to open the doors to brand new revenue-generating opportunities. While collectibles have traditionally relied on an intermediary to verify authenticity and ownership, NFTs allow a distributed group of individuals to share this responsibility.
NFTs are traceable digital tokens that are immutably linked to unique tangible or intangible objects. These tokens are used to reference the current owner of an item. Items can be anything from a computer file stored on someone else’s hard drive to a physical item kept in a safe.
Anyway, all NFT live on block chains. This technology provides a completely transparent, globally accessible, and censorship-resistant method of tracking and storing proprietary information. This factor allows anyone in the world to purchase and own items in a proven way, no matter where in the world they exist.
Generally speaking, any NFT has the potential to be collectable. However, there are some NFT-related items that the creators deliberately build to be collectible. Often, creators release NFTs as part of a very limited collection or based on an existing franchise. Examples of these include, TIME: Parts build a better future, Damien Hirst: CurrencyAnd Anthony Hopkins’ Eternal Collection.
Clockwise: TIME, The Currency, The Eternal
Beyond their aesthetic qualities, different NFT-based collections offer a range of different advantages and benefits to their owners.
Some collections focus heavily on the benefits of NFT Community Membershiphosting live events for their members to network and build relationships.
Others allow individuals to track ownership of unique digital items in metaverse experiences such as Decentralized And The sandbox. Play to win games like Axie Infinity And star atlas have also integrated NFTs. This feature allows players to truly own the in-game assets they accumulate. Based on their achievements in these games, individuals can earn items that have real value in the form of NFTs.
What benefits do NFTs bring to the collectibles market?
Because NFTs exist as purely digital records that (most often) point to intangible items, they offer several unique advantages over physical collectibles, including:
- Verifiable authenticity (without intermediary): Anyone with an internet connection can verify the authenticity of an NFT. By copying and pasting a wallet address, anyone can investigate any NFT. This verifiable authenticity avoids third-party fees and provides an indisputable degree of certainty about the authenticity of NFTs. While it is true that the backing of an NFT can be copied, blockchain technology makes it easy to know which NFT is real and which is a counterfeit.
- Immutable property: Similar to their ability to track authenticity, NFTs make it easier to track the rightful owner of a genuine NFT. When you purchase an original NFT, a blockchain network cryptographically stores proof of your ownership on the blockchain. This system provides a highly secure and tamper-proof means of tracking ownership.
- Global reach: The decentralized nature of blockchain technology makes it easy for NFTs to have a global presence. Since NFTs are actually digital collectibles, it’s much easier to connect and organize groups with other holders, regardless of their geographic location. Additionally, when buying or selling NFTs, it is usually much easier to access liquid secondary markets than when it comes to physical collectibles.
- Damage resistant: Some physical collectibles must be in mint condition to retain their value. NFTs, on the other hand, have no physical form and cannot degrade or sustain damage over time.
- Personal Security: The pseudonymous nature of blockchain-based NFTs means that holders can buy, own and trade these assets without having to share their identity.
What do NFTs offer to collect?
NFTs are valuable for the same reasons as physical collectibles: they are rare, aesthetically unique, and they represent membership in a community of co-owners.
Additionally, some NFTs display traits that end up being rarer than other traits in the collection. These qualities allow individuals to quantify the rarity of different NFTs and base their numerical value on that score.
Beyond rarity rankings, holders of certain NFT collections have begun to create their own exclusive communities that provide members-only access to private channels and platforms. Bored Ape Yacht Club (BAYC), doodlesAnd cool cats are all examples of NFT membership-based communities. This process adds an extra layer of utility to collectible NFTs and aims to keep demand for these limited assets high.
Whether or not you think digital collectibles offer the same “value” as physical items, there’s no denying that there’s global interest in the market. With sales already rivaling the prices of some extremely valuable physical collectibles, we’re definitely in uncharted – and exciting – territory.
Interested in starting your own NFT collection? Sign up for Kraken NFT Today!
