Are NFTs just dumb cartoon pictures or shitty art JPEGs that are just gambled on the blockchain?
Maybe, in many cases. But at the same time, in many other cases there is a deeper connection between the buyer and seller, whenever there is an NFT trade on the blockchain.
And that’s ‘Status Symbol’.
Status Driven Society
As per Statista’s 2021 report, the global art market was valued at 50 billion U.S. dollars in 2020.
That’s a lot of money, just so they can hang these portraits in their homes. While some see the value of the art, some see the value of owning that art as a status symbol. You and I might see neither, but just note that there are people willing to spend millions on a piece of painting.
And a particular piece of art is worth millions, because a lot of people believed that it’s worth millions.
Similarly, with Gold, it’s value is ultimately a social construction.
We all agree it always has been valuable and will be in the future.
But how often do you use gold, as in like really use it, but not as a status symbol. It’s a shiny rock that is scarce in the world and many people wear it as a Jewellery just to show off or to look good.
Similarly, with brands, how often people go to Starbucks (and many don’t even like their coffee)?
It generates $35B in revenue in a year, by selling status. Bru Coffee generates only millions in revenue, because it sells coffee powder, not coffee with status.
Louis Vuitton made $80B+ in revenue in 2022.
People who can’t really afford luxury goods also try to buy them, because that’s what sets them apart from the crowd.
It gives them that emotional satisfaction, no matter whether they really loved the product quality, or even use it to it’s full potential.
Imagine owning the latest version of iphone even before anybody in your peers group owns it.
How NFTs Fit In Status Driven Society
What NFTs gave to consumers is the ability to own something digitally, which ain’t possible in the pre-blockchain era.
Ok, that’s great, by why spend millions of dollars on an NFT, when you can just right-click save it?
I’d counter that with “Why spend money of Gold? It’s just a piece of rock, and you can even buy a Rold Gold if you just want to show off. Why spend money on an art when you can just get the picture of it, print it, make a portrait of it, and hang it at your home”.
You might say: “Well, at least I can sell the gold if it’s original, by proving it to the buyer. I can resell the painting, coz it’s the original one”.
Similarly, in the NFT world, if you can prove that you own it (thanks to blockchain tech) and if it’s from the original creator, you can always resell it. And in the process of a blockchain world, the verification process is pretty easy and simple.
Ok, why do you think a Crypto Punk NFT is worth 100s of thousands of dollars?
It’s just a picture. That’s what we might see.
But the one who purchased it for a big amount of money saw it as a digital collectable and belongs to the first ever PFP NFT collection ever created.
Justin Bieber paid $1.3M for a picture of a monkey and the picture of Jack Dorsey’s first tweet was sold for $2.9M.
Do you get it? We all want that status. We all want that attention. And that actually creates a sense of belonging to a community while at the same, stand out from the crowd.
NFTs In The Digital Realm
Ok, if all these NFT sales are status driven, how can they even show off?? I can drive a luxury car to my office and everybody automatically notices it.
First of all, we spend most of our time online. You are reading this article via internet. You share photos on Instagram, and you write your opinions on Twitter.
You value the likes your photo gets on Facebook more.
10-20 years ago, if somebody told you that all of this would happen, would you believed him or her. I’d have definitely considered it as ‘BS’.
But it happened. And we didn’t even know it, at least not to our conscious mind.
And that why NFTs makes sense. Because they are the digital status symbols, similar to how a picture of someone posing with a Ferrari and posting it online is a status symbol.
Welcome to the next level of ‘Status Games’.