What Gives an NFT Value?

I like to think of NFTs as 1/1 art that can get appraised without Rick from the Pawn Stars calling in an expert. All he'd have to do is check the blockchain to ensure it's authentic. There is also no corruption error, like Rick paying the expert before he walks in the door to undervalue the art so he can get a better deal. 

NFTs are on multiple blockchains. But the most popular NFTs are on ETH because they were the first movers, and ETH has the second-highest market cap next to Bitcoin (making it least likely to fail).

I also like to think of NFTs as two things. "Paintings" and "Keys." 

Thinking about NFTs as a painting is more intuitive. Humans have been buying and re-selling artwork for a long time. Artwork from dead artists goes up in value over multiple years (the more famous the artist is, the more it goes up). 

But how do we think of an NFT as a key?

It's like owning a Rolex. Some people like watches. But some people only buy watches as a status symbol. The Rolex is a "key" to unlock social approval from people who think Rolexes are cool.

It's like pulling up to a Lambo at a red light in a beaten-up rusty car and asking them to roll down their windows. They might not. But if you pulled up in a Lambo, they'd probably roll down their windows to greet you without you having to ask. The same goes for CryptoPunk owners.

The ego aspect of NFTs like CryptoPunks is that people can flex it to millions of followers. If they buy an expensive Rolex, they can only flex it to people in real life or on Instagram when they post photos with their wrist in it. If they own a CryptoPunk, they could satisfy their ego by flexing on millions of followers 24/7 by setting it as their profile pic.

When investing in NFTs for profit and not art, try thinking about them as keys that unlock status symbols. Humans have not changed much over time and still love to judge people based on the things they own. What will everyone think is cool in the future?