What is an NFT & Why Do People Buy Them?

There is a very clear line in the sand.

There are people on one side of that line that LOVE NFTs. I mean, they are obsessed with them. They are not just a hobby. They are a way of life.

On the other side of that line are people that just… don’t get it.

It’s not that they hate NFTs, it just doesn’t make sense. WHY is someone paying hundreds, THOUSANDS (MILLIONS!) of dollars for a picture they could just right-click save??

If you’re here, you’re probably in that second camp.

I was in that second camp not too long ago, too, and I’ve been transformed.

What is an NFT?

I’m going to leave the (boring) technical stuff to this video which I think explains technically what an NFT is pretty well. And succinctly. Because honestly, the technical stuff is kind of boring.

NFT’s are actually exciting once you get past the technical stuff.

They are about Art! and Money! and Community!

We’ll use our NFT, Boopie, to illustrate each of those things:

Boopie is an example of an NFT. 

Boopie is on the Solana blockchain which basically means if you want a Boopie, you’re going to need some Sol (the crypto that is accepted for Solana) and you’re going to need a wallet to hold that Boopie in like Phantom.)

That’s kind of the boring stuff, though. Let’s talk about the exciting stuff. 

Let’s talk about NFTs as art first.

NFTs as Collectible Art

Let me start by saying, an NFT doesn’t have to be visual art. There are lots of things an NFT can be, but most likely you’re going to be interested the ones like Boopie that are cool art to look at and maybe use as your avatar on Twitter (that’s what all the cool crypto people do!).

Ok, so Boopie is an example of a Generative Art NFT. 

The one you’re looking at is one of 2,200 Boopies that are each unique but share a similar set of attributes. 

That means that there are no two Boopies that are exactly the same. They are each unique pieces from a larger set. 

This is part of what makes NFTs so collectible.

For instance, you might find a common attribute or combination of attributes that you want to collect. 

Like these “monos” as the Boopieverse has dubbed them:

Other NFTs create rarity by limiting the amount of certain traits and that promotes collecting, too. 

If you’ve collected trading cards you can relate to this. Some people open Pokemon cards looking for a rare Gold Pikachu. Another person might want all of the different Charizards.

It’s the same with NFTs. Some people mint NFTs with the hope of getting a “rare” or they might just scour the secondary markets for the rare attributes they want. Others just might pick a particular attribute that they love and want to collect those.

Let’s go back to the Boopie and break down the attributes. 

Boopies are made up of 6 visible attributes (there are three more hidden attributes, but that’s not important right now):

  • Background
  • Skin
  • Hat
  • Nose Eyes
  • Mask Eyes
  • Mouth

And each of those attributes have a bunch of different options.

And that’s where it gets exciting. 

The artist creates the general shape (in this case it’s the outline of the Boopie) and each of the different attributes. 

And then the final results of each Boopie are randomly generated with some magical coding. 

That means the final “art” is kind of out of the artist’s control. It’s a pretty amazing concept, actually.  

So you can get this:

or this

It’s obvious these are two pieces from the same collection of Boopies, but they are also completely unique and can stand on their own as a piece of art.

But it’s entirely up to the coding to decide the final outcomes out of the 35 billion possible.

There are combinations that separate from everything make you think, really? THAT was randomly generated?

The balance of color in this Boopie makes me feel like it HAD to have had some conscious thought in assembling it, but it’s completely random.

It’s a fascinating combination of foresight on the part of the artist to pick colors and patterns that will all work well together and then the randomness of generative code. 

Then there’s also 1:1 NFTs that are not a collection like Boopie, just one singular piece.

That’s “Everydays” by Beeple. 

It sold at auction for 69 million dollars in March of 2021. It’s an example of a 1:1 NFT. 

Don’t worry though.

You don’t have to be ultra-rich to buy a unique 1:1 piece of digital art. 

There are these examples you might love, too:

That’s “Solana Beach 001”. It was auctioned and sold for 12.5 Sol.

Now, as with any Art, it is subjective. 

You might not see the art in every NFT you come across, but that’s one of the reasons it is so exciting. There’s always a feeling of being on a treasure hunt for that one piece or that one collection that truly speaks to you. 

If that sounds exciting to you because you are into art, then you will love the NFT scene. 

NFT Communities

The art isn’t the only thing you get when you buy an NFT. You also become a part of a community of people who also love that NFT project that you bought into. 

So…. Stick with me here, though. I know that if you are not a person who has ever been a part of an online community it can seem a little…. Weird?

Like maybe not something you’d find value in joining. 

I’m telling you right now, a really good NFT community is an amazing thing to belong to. 

The Boopieverse Discord community is generally made up of all kinds of people from all over the world who, to start, have one thing in common.

They bought a Boopie!

Or they might be interested in buying a Boopie. You don’t actually have to own a Boopie to join the Discord.

You can just come and check out the vibe and see if it’s something you’re interested in before you buy your Boopie.

OR you can just chill and participate in fun conversations and never buy a Boopie. We won’t hold it against you, but, I do think that you’ll have a hard time NOT buying a Boopie if you do end up falling in love with the community. 

Here are some things that happen in an NFT community that will make you want to stay a part of that community forever:

  • Lively discussions on NFTs, but also on just anything
  • Fun Contests (that might win you a new NFT!)
  • Play to Earn gaming (not every NFT has this (Boopie does not), but it’s a big pull for a lot of people)
  • “Airdrops” (these are like little gifts that the project owners might leave for you in your wallet from time to time. It’s like stocking stuffers on Christmas).
  • Access to exclusive perks like merchandise, tickets to events, meet ups, subscriptions (honestly this list is as long as the collective imaginations of project owners & communities)

Ok but here’s the thing that’s different about NFT communities. There is an anonymity that comes with being part of the community that is extremely freeing.

You are a human behind an avatar, all of your visual characteristics beyond that disappear. It’s very different from being part of an IRL community. Connections are built based solely on the thoughts you express. And also what you choose to have as an avatar.

That’s my Twitter Avatar!

Just consider that for a second. You will either love that stripped-down access to each other’s brains. Or you will not. Honestly, if it’s not for you, it’s just not for you. 

But you cannot deny that it is wildly different from the way we interact in real life where our faces, bodies and clothing are the first point of access to how others can perceive us. Before a word comes out of your mouth, there’s your visual representation of who you are that others see. 

That’s not to say that NFT land is a utopia where what you look like has ceased to matter. Instead of your Gucci bag giving you status, your Solana Monkey Business avatar will still do that.

But there is definitely an interesting shift. I haven’t completely grasped what that shift is and whether it’s a good thing or not yet, but it’s very interesting to be a part of. 

NFTs and Money

So far I think the value people find in NFTs is probably making sense. You can purchase digital art that you really love and you become part of a community of like-minded people who also love that art. 

That part is pretty easy to understand. 

The part about NFTs that is more difficult to describe is why you would spend money on them in the first place. And how they increase in value. 

The image that you see above, Beeple’s 5000 Days is not any different than the image that whoever bought the NFT for 69 million dollars has. They didn’t get a canvas to hang on their wall. The only thing separating what they purchased from what you can just right-click save is the digital certificate that says they are the person who actually owns it. 

This is where people go, why on earth would I spend money on this then? I can enjoy the art whether I own it or not.

Well, in addition to the community and whatever perks come with that, some people make a lot of money buying and selling NFTs. 

Here’s the basic idea. 

We’ll use Boopie as the example again. 

On October 18th, 2021, Boopies were “minted”. Minting is the initial offering of an NFT for the public to purchase. 

The price to purchase was .5 Sol (which at the moment in time that Boopies were minted was about $150USD). 

2.5 weeks since minting, that very same Boopie can be sold on a secondary marketplace and sold for a profit. 

How much profit? 

Well, that can certainly depend. 

And is probably left better to its own post. 

But for example…

That lovely Boopie sold for 1.25 Sol. If I get out my handy calculator, that’s .75 more than the mint price. So that is a profit.

Not to mention that the cost of Sol on the day of that purchase was up to about $245.

So, let’s assume that the person that sold that Boopie is the original owner from mint. They spent .5 Sol (about $75 dollars at the time) and they later sold it on a secondary market for 1.25 Sol which on that particular day was the equivalent of $303. Not bad, right??

There are way more wild stories of practically unfathomable gains made from selling NFTs, but of course that’s not necessarily going to be the case for every NFT you mint. 

And that’s Ok. Because making money is just one reason to collect NFTs.

Why Should You KEEP an NFT Then?

I left the money-making part to the end on purpose.

Because if you can make money buying and selling NFTs, then why do some people want to hold on to them forever?

It’s because you get the honor of owning the beautiful art that caught your eye and the community that you have grown to love and look forward to checking in with daily, plus any perks that come with that community.

So when you do get an NFT like a Boopie, you’re probably going to want to get more than one.

At least one to keep forever and one or two (or 20) that you might want to sell for a profit someday.