3 June 2023
Crypto Fans Pay Extra For NFT Cars Than Real Cars
Imagine you had access to millions of money. If you're a car fanatic, maybe you'll spring for the newest Ferrari or a classic Aston Martin from the '50s. If you can't even operate a vehicle, why would you pay a fortune for it? Vanarama's study demonstrates that, despite the fact that it seems counterintuitive, individuals are willing to spend a lot of money on NFTs relating to cars. This implies that they have full ownership of the car's digital depiction or which can be seen and downloaded by anybody, but they will never really get their hands on the physical vehicle.
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Before we go any further with this discussion, let's first define several key terms, including Cryptocurrency, non-fungible tokens (NFTs), and car NFTs (NFT Cars). The time has come, therefore, to get started.
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What is Cryptocurrency?
A Cryptocurrency is a string of encrypted data representing monetary value. A distributed database termed a blockchain keeps track of all the purchases, sales, and transfers that take place in the system. Cryptos really aren't generated by local authorities or other monetary authorities as traditional fiat currency does. Mining is the process by which a network of computers or specialized hardware like application-specific integrated circuits (ASICs) process and confirm the activities that give rise to someone and protect Cryptos like bitcoin. Those who maintain the network, known as "miners," are rewarded in bitcoin for their efforts. Common digital monies include Bitcoin, Ethereum, Litecoin, as well as Monero.
What is NFT?
Virtual assets such as works of art, songs, gaming items, as well as films may be converted into NFTs. Like many Cryptocurrencies, they may be purchased and traded on the internet, often using digital cash, and are created using the same underlying programming language. While NFTs have been available since 2014, they are now enjoying a surge in popularity as a means of trading virtual artworks. Since November 2017, investors have poured an astonishing $174 million into NFTs. Additionally, NFTs are often individual or extremely rare. NFTs, in essence, produce virtual shortages. In stark contradiction, electronic works are nearly usually available in a limitless quantity. Considering there is demand for an item, its value should theoretically increase if the supply is suddenly cut off. Several NFTs, with minimum in the beginning, were just collateralized copies of digital works that already existed elsewhere, such as famous highlights from NBA games or Instagram photos.
What Do You Mean By NFT Cars?
Cars NFTs or NFT Cars, refer to non-fungible tokens that have been designed with automobile owners in mind. To put it another way, it's a piece of art that was released as an NFT by a vehicle company. These may be anything from behind-the-scenes images and films to animated snippets or even a live race. The Ethereum platform, a decentralized public ledger, is where the majority of automotive NFTs can be found. Those coins contain crucial data and are treated as separate entities. As their worth is determined originally by consumer demand, they may be traded like actual works of art. Furthermore, the unique information stored in NFTs makes it easy to verify ownership and the transfer of coins between proprietors.
According to the research, consumers are prepared to spend additional money on the NFT model than for the physical vehicle itself. I'll give you four examples of how ridiculous things can go:
1. Nissan GT-R
In September, a 3D model of a Nissan GT-R sports car that was shown in three dimensions sold at auction for more than $2.3 million. This represents a multiple of ten the worth of his vehicle, which is valued at $200,000.
2. A Video of an Exploding Lamborghini
You can expect to spend around $200,000 on a brand-new Lamborghini Huracan. This is far less expensive than the insane sum of $250,000 which was paid for a video showing one exploding into pieces. The artist who was responsible for it, who goes by the alias Shl0ms, said at the time that his design was more of a criticism against "Crypto culture" than just an effort to earn a revenue from it.
3. DeLorean DMC-12
Individuals who love the film "Back to the Future" might spend very less than $50,000 to own a "time travel" DeLorean. On the other hand, the NFT variant has a price tag of $183,000.
4. The Car Man Logo
That is, in fact, nothing more than a logo, and a two-dimensional one at that. Interestingly, it's the highest costly vehicle-related non-financial transaction ever recorded, with a price tag of an astounding $8,562,450 million at the moment. You can rather spend $6.9 million to get an original Aston Martin DB5, which is now one of the most highly sought-after antique automobiles on the market, and still have some money left over.
Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.