When we start to talk about digital currencies and digital ownership, the question of whether or not they have value always comes up. It was obviously something I thought about before I ever bought my first bitcoin.
Defining value was the first thing. How does something have value? And the answer to that question is so obscenely simple yet mind blowing all at the same time. Things have value when someone else agrees that it has value.
It doesn't have to be everyone agreeing, just even one other person agreeing that it has value, makes it have value.
Let's say you have a $5 bill. Why does it have value? Only because the people around you agree that it has value. If you take a trip to France, that same $5 bill you have suddenly has no value. You would have to find someone who agrees that it has value in order to convert the value (a money changer) to something you can use there.
It's value is fully dependent on the people around you and how they feel about it.
So does Bitcoin have value? There are millions of people who agree that it does in fact have value, therefore it does. So long as there are exchanges, even one, Bitcoin will have value. The difference is, Bitcoin is on a global scale. There are people in every country believe that Bitcoin has value and therefore it does have value in every country.
If you go to El Salvador, their entire country now agrees that it has value and you can just straight up trade your Bitcoin for goods and services there. No conversion needed.
So now, do NFTs have value? Same principle. Digital ownership is no different. (Disclaimer though, not all NFTs are created equal. I wouldn't put my faith in a bored ape NFT, but that's my own personal opinion.)
Let's discuss this in terms of a physical piece of art.
Why does the Mona Lisa have value? The same exact reason. People my have varying opinions on why the Mona Lisa has value to them, individually, but ultimately it has value because other people believe it has value.
So do NFTs have value? As long as you can find someone else who believes it has value, it has value. Inevitably people discuss "right clicking" NFTs and downloading the image. They suggest that makes them worthless because you can download it for free.
But guess what, you can "right click" the Mona Lisa. Everyone on the planet who has the internet has access to an ultra high res scan of the Mona Lisa. I'll even share it with you.
Click Here to Download the Mona Lisa.
I right clicked the Mona Lisa, therefore it has no value. It is the same logic. And people will say "but it's different". I agree, in my opinion the scan is vastly superior to the original because it will not deteriorate any more and I can show people around the world without them having to travel anywhere to see it. But that's my opinion, and so long as there are people out there who disagree with that opinion and believe the original is more valuable, it will be valuable.
To me, owning an NFT from my favorite artists holds far more value to me than owning the Mona Lisa. Honestly, not a huge fan of Leonardo's style. The Mona Lisa doesn't hold any value to me. But it doesn't matter that it doesn't hold value to me as long as it holds value to someone, it has value. And it is because of that NFTs do have value.
Sure, I'd like to own the Mona Lisa so I could sell it immediately for the cash, but wouldn't you like to own a $3 million NFT of Wonder Woman that you could sell immediately for the cash also?
While it has taken some time, digital ownership is growing every year. And every year more and more people agree that digital assets have value. It doesn't matter how many people disagree, so long as there are people who agree that it has value, it does.
Digital investments work the same as physical ones. They will decrease and increase in value with scarcity and interest. The more people interested and the fewer available, the higher the value. It works exactly the same as physical assets.
And now you can understand why NFTs are selling like crazy right now. This is the ground floor for collectors. Buying legit official NFTs right now will be the equivalent to owning Hank Aaron's rookie card in another 30-40 years.
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