As a prolific watcher of the show Pawn Stars, I can tell you exactly why this is. Imagine the first edition of Harry Potter and the Sorceror's Stone. JK Rowling is an unknown author, the original run is comparatively very small and there's nothing special about the book so people read them which adds wear and tear and worse they sometimes throw them away! So you're left with very few pristine copies of that first edition. It's rare as hell and there's nothing you can do to make more of them.
Subsequent editions sell about 107 million copies. There are tens of millions of later editions in pristine copy. People bought them explicitly to collect them and put them in plastic containers. There are tons of them!
So that first edition has real scarcity. You can never make more. Can't say that about NFTs.
NFTs are silly, but collectors are inherently silly
I don't think this is what is happening at all. I think NFTs are a tax scam that cause them to sell for ridiculous $100,000+ prices and then regular people see that and think they can get rich by getting into NFTs. All the while not realizing the real deal is to dodge taxes and this NFT collector stuff is nonsense.
Lots of things are scarce, but have no value. The value is in possessing a scarce and "authorized" representation of a popular thing.
> You can never make more. Can't say that about NFTs
Like any limited-edition thing, the promise is that there won't be more. You could absolutely forge a first-edition Harry Potter book. Someone probably has. And it would probably be more convincing than a "forged"/regenerated NFT. There has to be some trust in the official producer, and yes that's hard to come by in this space!
> I think NFTs are a tax scam
Well sure, like art or wine. But not all art or wine.
The use of the word "authorized" seems artificial in this context. I agree with you on scarcity and popularity being a requirement. But authorized seems off. A first edition Harry Potter book isn't authorized, it's just real. Forgeries are just fake, they aren't "unauthorized".
Another thing I learned from Pawn Stars are that things that were manufactured for collecting often are valueless. Harry Potter was written for the purposes of telling a story. It became popular because many people enjoyed it. First editions of the book had a natural progression to scarcity and popularity. On the flip side, Disney manufacturers "collectibles" all the time but they often are worthless. NFTs seem to be manufactured for collecting. Will they be more popular than Beanie Babies ended up being?
Well sure, like art or wine. But not all art or wine.
I think all NFTs selling for large dollar amounts are for tax dodging.
You consume the more convenient/less valuable copies. The usage is commoditized, but the possession is exclusive.
There's a premium placed on first-edition hardcover books. The contents are identical to the trade paperback or the EPUB.
There's value attached to the original limited pressing of a vinyl record which has since been repressed, reissued on CD, and is now available for download (legally or otherwise) in digital form.
Consuming the media, in either example, is available to all. Possessing some marker of specialness is coveted. People are complicated.
NFTs are silly, but collectors are inherently silly if you choose to look at it that way.