NFTs AS A SYMBOL FOR DIGITAL STATUS
Wikipedia defines a status symbol as “a visible, external symbol of one’s social position, an indicator of economic or social status.” It further adds that “as people aspire to high status, they often seek its symbols.” Throughout history, humans have found new objects to represent status.
A status symbol must be rare, or at least project a perception of artificial scarcity. It must be associated with members of a particular class, such that possessing one confers status on the owner. Lastly, there must be some cost associated with securing ownership of the status symbol. When all these qualities combine in one object, it becomes a status symbol.
Every era has its status symbols. Hermés bags, and Givenchy dresses in the Sixties. Classic Porsches and Ferraris in the Nineties. Century-old wines, Renaissance paintings, and first-edition books in the early 2000s.
Lately, though, the influence of technology on status symbols has increased. For instance, instead of classic cars, Lamborghinis and Aston Martins engineered for superior performance have become the new symbols among automotive enthusiasts. And the latest iPhone or AirPods is likely to command more attention at a Millenial/Gen Z party than a Givenchy dress.
In the 21st century, in the era of blockchain and the emergence of Web3, we come to witness NFTs bringing about a sense of digital status. NFTs attain all the qualities of a status symbol, as defined in the introduction:
· It is rare.
· It projects a perception of artificial scarcity.
· It is associated with members of a particular class, such that possessing one confers status on the owner.
· Lastly, there must be some cost associated with securing ownership of the status symbol.
We have so many ways to show off status in the physical world. Big homes, expensive cars, fancy watches, designer clothes — these are all ways to show off your status (wealth). Until now, it’s been impossible to show off status online. This prospect has been changed by bringing this form of scarcity online.
There’s an interesting thing that happens when you buy a Ferrari or a Rolex, you get to join a passionate community that pulls you down further the rabbit hole. This is exactly what happens with NFTs right now. People come for status but stay for the community. Communities such as the Bored Ape Yacht Club, Cryptopunks, Veefriends, and World of Women create a sense of belonging to the holders of their NFTs. Akin to the Crypto community, people come in for the money but stay for the technology and community as well.
This is also why people don’t understand NFTs. It’s no different than not understanding why people spend $400,000 on a Lamborghini. You don’t spend $31 million on a Patek Philippe Grandmaster Chime because it tells the best time. No normal Tom, Dick, and Harry would just buy such a watch at such a price unless it’s for personal reasons. Not to flex as such, come to think of it. To most, that seems absurd. But to the Lamborghini owner, it’s a way to show off their status and hang out with a like-minded community. This is not less a reason why celebrities such as Eminem, Lil Baby, and Steph Curry take their NFTs onto Twitter and are dropping six-figure amounts on such art.
NFTs also bring about utilities that can be used in various aspects of our lives. They are built to give their token holders certain perks, like passive income earning opportunities such as:
· As a ticket for exclusive events and merchandise.
· In the gaming industry.
· In the fashion and art industry.
· For virtual real estate.
Despite all these, NFTs bring about the economic value to their token holders as they appreciate over long periods. This is usually the most legit reason why anyone gets into NFTs but still doesn’t limit one to hold them due to the reasons listed above.
Like ’em or hate ’em, NFTs are here, at least for the foreseeable future. They will serve as society’s newest symbols — alchemy of art, technology, and culture. You might not like the artwork or the people. You might not like change, but hating on NFTs is no different than hating an expensive collectible such as a car, art, watch, etc. as the world moves online, the market for digitally scarce items will 1000x. Well, better get used to it.
NFTs are not only for the obnoxious, wealthy, tech-elite. This couldn’t be farther from the truth. They are changing the future lives of artists, designers, and even musicians.
Will their value drop at some point? Maybe. The world has gone digital, and interest in NFTs is only a by-product of this shift. Once everyone gets this, then perhaps NFTs may start to make sense. Not conversant with NFTs that much, I got you. Click here to get started.