[a_shovel]

Yeah, the star registry comparison is common, and a good explanation of how NFTs work. I'm more trying to explain how their price works, and what forces drive their increases.

Bitcoins' price increase is driven by scarcity and speculation. NFTs' price increase is driven partly by speculation, but also by the appearance of speculation, a series of wash trades of increasing value that seem to outsiders to be actual people buying the item for increasing prices. The buyer doesn't know that those were all one person trading with themselves, so they expect that, even if they can't sell for a profit, they can still sell for a minor loss. Then, once they buy it, one of two things can happen: 1. They ride off the hype wave from the original seller, and build it up some more themselves, then find a bigger fool to flip the NFT to; or 2. They keep it a while, the hype wave dies down, and if they ever look to sell it they'll find the real level of demand is way below what they were expecting. Either way, the house gets its cut. It's all a gold-brick scam.