The NFT collectible market is one of the biggest NFT sectors. Projects like CryptoKitties and CryptoPunks have led the charge for raising awareness of NFTs, and during their short existence, they have been valued at millions of dollars and been used as collateral for countless loans. With such a lucrative (albeit tiny) history, many are looking to enter the market, but are apprehensive about whether the industry can sustain itself, or whether it will collapse.
This is an especially salient fear for those who are considering using NFT collectibles as collateral in the future, as a depreciating market is no good for borrowers. Lucky for them, the NFT collectible sector is largely different from other markets, with distinct aspects that suggest a lucrative and fruitful future. Let’s take a look at these aspects.
The Human Desire for Collecting
Humans have been collecting for as long as we’ve existed as a species. Chances are, you know somebody who collects things, or you collect things yourself. It is an activity that transcends time, cultural backgrounds, and sometimes even sense. People are known to spend unbelievable amounts of money on attaining goods they deem to be rare, unique, or mesmerizing in some way. As Joseph Rykwert notes, “even the earliest hunter-gatherers made and collected objects”. Collecting is so prevalent in our history that we might as well call it a symptom of the human condition.
Understanding why exactly we collect is a tough question, in part because it crosses disciplinary boundaries. It is a psychological, anthropological, sociological, historical, and philosophical question. This makes it notoriously hard to study as it requires somebody to have knowledge of multiple areas. That being said, some people have developed possible theories. Joseph Rykwert suggests a deeply Freudian theory that we collect as a means of control, as control gives us comfort.
Susan Pearce, perhaps the most well-versed academic on the topic, argued that in the Western world collecting is a pursuit of both knowledge and individualism. People believe they can learn something unique and significant through their collecting, and in many circumstances, they believe they can help teach others (which is what museum collectors do). Many also collect as a way of standing out from the crowd and exploring their own identity through the objects they own. This is something we all do automatically with clothing, but it can really happen with anything being collected.
The pursuit of individualism is something very visible in the NFT collectible scene. With NFTs all being “one-of-a-kind”, people can feel special and unique simply by owning them. This also helps satiate the human “need for uniqueness”, which is “a person’s need to feel special and different from others”.
Collecting as a Means of Forming Social Bonds
A more wholesome aspect of any collectible market (including the NFT market), is that it can work as a community-building endeavor. Many people collect items so they can interact with others who collect the same items. This is most noticeable in the trading card world where you need a relatively big collection of cards before you can sufficiently compete with others.
There are numerous NFT trading card projects on the market, such as the NBA’s Top Shot cards, Sorare, and Skyweaver. These projects straddle the line between NFT games and mere collectibles. Having large collections of specific projects allows you to interact with others where you share a common ground and common topics. In this sense, collecting acts as a “social proof”, which is where somebody or something uses certain metrics to prove to others they are trustworthy and desirable. By showing your collection to another collector, somebody can instantly prove they are worthy of engaging with.
Many people build their whole lives around collecting, not only for knowledge and individualism but because their social connections are intertwined with them.
NFTs Represent Something Bigger
Most of our discussion has explored the collectible industry as a whole, but there is one element that is unique to the NFT world. It cannot be ignored that NFT’s are a part of the crypto and blockchain industry, and so it shares the same ideological merits. In particular, NFTs represent a seismic shift from institutional control to economic freedom. To collect NFTs means something very different from collecting a physical object– it is a simple way of promoting your support of decentralization to the public.
This means that NFT collectibles all inherent a certain emotive quality. They are a way of marking somebody’s alignment with the redistribution of power and wealth, the likes of which are brought by crypto.
Recap
To summarise, the NFT collectible market appears to be a strong investment because they help make people feel comfortable, they promote knowledge and individualism, they build social connections via social proof, and they establish somebody’s alignment with decentralization. In other words, this is a highly versatile market, one which is sure to stay lucrative for a long, long time.
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