Collectibles Meaning
What Are Digital Collectibles?
Generally, the term “collectible” refers to something worth ‘collecting.’ In crypto, a digital collectible is a digital item or asset deemed valuable due to its uniqueness. Its value is typically determined by its verifiable limited supply. Digital collectibles constitute a visual element, such as video clips, digital art, music, photos, or digital trading cards. And like physical assets, users can trade, buy, sell, and hold them as investments.
So, are they the same as NFTs?
Digital collectibles are simply a subset of non-fungible tokens (NFTs). This means that, while they are NFTs, NFTs may not exclusively be digital collectibles. Consider the collectibles as the virtual products (videos, photos, etc.) and the NFTs as the certificate showcasing digital proof of ownership of the virtual product. An NFT is what makes the virtual item or asset stand out, giving it its value.
As such, they leverage blockchain technology to create NFTs, which facilitates digital ownership and distribution. Blockchain technology secures and authenticates the collectibles to ensure their rarity while upholding intellectual property (IP). This ensures the transfer of ownership from one person to another as opposed to copying like regular computer files.
What are the benefits of owning them?
Some of the benefits of owning one include:
- Proof of ownership and authenticity – Blockchain technology facilitates the rarity and traceability of the ownership of collectibles, ensuring that the user owns the authentic piece of a digital item.
- Utility – Brands can use them as digital badges or avatars to fortify their presence amongst other users. It also fosters a sense of exclusivity among collectors during interactions.
- Scarcity and rarity – The uniqueness and verifiable limited supply determine their value and the desire for collectors to acquire them.
- Financial potential – Due to their rarity and scarcity, digital collectible owners can monetize them in virtual worlds or trade them for cryptocurrencies or fiat money.
- Security – Blockchain technology ensures the immutability of digital collectibles, safeguarding them from counterfeiting attempts.
