Why Do People Buy Things that They Cannot Touch?
During my time in su-re.co, I have come across so much information that is new to me, one of which is the concept of cryptocurrency, blockchain, and NFTs. At first, I didn't understand why any rational person would invest in bitcoin whose value is completely arbitrary. I was also confused as to how mining something that did not tangibly exist could take up so much energy.
Image source: https://www.investopedia.com/terms/b/blockchain.asp
While there are other resources that could better explain how these concepts work, I would like to share my findings regarding why these systems have become so popular. The main appeal of cryptocurrency is its decentralized nature, this means that this system is not controlled by any central government. This is particularly appealing for people who value transparency over anything, as power is not concentrated on the upper echelons but reclaimed by its users. For NFTs in particular, people love the sense of ownership they have over the tokens that they bought. After something is minted on the blockchain, there is no possible way for anyone to make changes to it. So on the outside, it may seem that this person is only buying an image online, but what differentiates it from just directly downloading a jpeg image is that they have full ownership of the image that no one else has. The simplest comparative is buying artwork. Some might think that a $100,000 abstract painting is a complete waste of money, while others think that it is a worthy investment. The key here is that just like paintings, the "value" of NFTs and other tokens are completely subjective.
Moving forward, there are many benefits that could be derived from the increasing popularity of blockchain systems. One of them is the concept of carbon trading, wherein the number of carbon captured by various methods can be quantified and minted on the blockchain. This allows people to "buy" decarbonization efforts and in turn get a certificate that shows that they did indeed contribute to these decarbonization efforts.
In conclusion, because we cannot control the vast progress of technology, we must always strive to catch up to it so as not to let it leave us behind. For those reasons, I feel fortunate to be in this environment that fosters and encourages continuous learning. I hope that you are too!