Part 2: Physical Collectibles VS NFT Collectibles
Why do we collect cute and memorable things?
What's one thing you've kept with you since young? Stamps? Cards? Toys? What is it about these that makes them worth keeping?
Collectibles invoke a sense of nostalgia, and while that's personal, collectibles have also become a market of its own. This is because collectors long for nostalgia and would pay top sums for some of these artefacts. With buyers and sellers, there then comes a market and the transactional exchanges draws in. yet another group of people – the speculators.
Speculators buy collectibles for the sole purpose of asset appreciation. Given that these artefacts have formed a market of its own, super rare items become extremely sought after by all types of collectors, and this promise attracts them to buy and hold, therein constricting the supply even further. For collectibles, the market will exist for as long as there are collectors.
How NFTs and Physical Collectibles Are Different
NFTs are essentially digital collectibles.
The benefits of having it digital are:
You do not need to care for the deterioration of the item
You do not need to meet IRL (in real life) to do the transaction, so you do need to pay for courier fees or lug it around yourself
It is verifiable – you can easily tell the real from the fake, just by checking the blockchain records
You can easily resell it on online marketplaces, or even keep it to pass it down to your kids
You can fractionalise it i.e. break it down into many pieces and have multiple owners to one item
Fractional ownership is still very novel in the space, as is NFT as a whole, and it can potentially spark legal issues because the owner offering fractional share might be offering a security, but the technology is sound and functional already.
Although NFTs may have all that benefits, it is still a relative niche market (as are collectibles). Further, you have to be responsible for your own tokens in a world filled with scams and hacks –a major security risk compared to physical collectibles. Nonetheless, the point is to illustrate that NFT collectibles are just like physical collectibles, but potentially better.
Why Do People Collect NFTs?
Yes, some people collect NFT as collectibles. And yes, a lot of them are in it for speculative reason, But NFTs serve a lot more purpose than just collectibles. For example, there are people who collect art – be it to hold as an asset or use it to move money – but NFTs fit their needs perfect.
Then, there are people who collect NFTs to connect with the community. It can be a community of artists. It can be a community of fans, or of people who just come together because they are in the NFT space early. For them, NFTs are an access token that exists virtually and can be passed down or resold.
Then, there are people who just love collectibles and dabbling in them. This is where NBA TopShot, Marvel and DC NFTs will come in, and people collect these just because they identify with it. When NFT social profiles become mainstream, owning these NFTs tells others about who they are and what they vibe with.
It's not just about the collectibles – that's just a subset of NFTs. Every one collects NFT for their own personal reasons.
Any one can be an NFT collector.