“As soon as humans have enough abundance to have their basic needs met—food, shelter, warmth, et cetera—the next frontier is to create value in things that have no inherent value. The value turns into psychological hype, excitement around a certain thing,” said journalist and YouTube content creator Johnny Harris. “And if there’s anything that gets human psychology to value something, it’s if an entire group validates that it’s real and that there’s only one of them.”
That’s how artist Mike Winkelmann, known as Beeple, sold a JPG image for $69.3 million. Let that sink in for a minute. A JPG image—one that is downloadable for free and embedded into this blog post—sold for the price of the Thompson Center, a 17-story governmental building in Chicago.
Most of us can’t fathom that kind of money or why anyone would want to spend it on an image that everyone can access for free. But we can understand that exclusivity fuels our buying decisions. It’s the innovation and scarcity that spark a buyer’s interest.
“We’re excited to own a unique picture. Not to go all Ready Player One, but it seems inevitable that people will want the means to express and represent themselves, their aesthetics, in the digital space,” said Donnie Dinch, the CFO of the NFT storefront called Bitski.
That’s why limited-edition products sell out within minutes online. We place value in expression and even more value in rarity. And the hysteria around NFTs is what keeps capturing our attention. It’s a cycle that feeds itself. It doesn’t matter if it’s an artist selling their work or a brand selling files of their logo. The novelty makes NFTs relevant and here for the long haul.