NFTs seem to be all the rage within the investment sector, but are they really worth investment? Do they increase in value and how do they do so? Let’s investigate…
Non-fungible Tokens (NFTs) are digital assets that may be exchanged over the internet. They are created and sold using cryptocurrency, Ethereum for the most part, which is a sort of digital cash that has an encrypted key that is frequently a random string of digits.
Companies are even developing their own NFTs as part of their marketing mix since NFTs provide a unique marketplace for digital assets. Aside from that, NFTs provide consumers with a customizable option to store, manage, and safeguard their personal information. NFTs creators may also get royalties and a portion of future sales from their NFTs.
A non-fungible token, in essence, converts a digital piece of art or similar item into a one-of-a-kind, a verifiable digital asset that may be exchanged on the NFT market or using NFT blockchain technology. Many NFTs come with their own set of data, such as ownership and transaction details, which are recorded in the smart contract. During exchanges, NFT authors may add features to their NFTs such as the creator’s identification, secure URLs to files, and more.
A digital NFT wallet is required for anyone interested in collecting or investing in non-fungible tokens. A digital wallet is a cryptocurrency wallet that is compatible with blockchain technology, which is the foundation for NFTs. Users often utilise cryptocurrencies such as Bitcoin, Ethereum, and Dogecoin as a means of trade.
So, now we know what an NFT is and how they’re traded, let’s talk about its value.
Can an NFT Go Up In Value?
Owing to speculation and rarity, NFTs have the potential to rise in value. As a result, if an NFT holder resells the asset, the resale value may be much greater than the initial purchase, depending on where buyers believe the asset’s worth is.
Think of it as standard, physical artwork. A lot of the value in a painting comes from the perceived value of those who are making the purchase. While many people may agree on a particular value, some will think it is worth more and some will think it is worth less.
Let’s take a look at everything that plays a part in determining the value of NFTs.
What Is An NFT Worth?
A digital asset’s scarcity might be the most important aspect in determining its worth. It might be regarded as a precious asset if it is in restricted supply. Other aspects, such as who is releasing the NFTs, will, of course, have to be considered. The restricted quantity will be more appealing to NFT enthusiasts if it’s a well-known character, a well-known firm, or a brand that people believe has promise.
An additional important component in the value of digital collectables is their versatility, since many NFTs may be utilised for purposes other than art. NFT sellers may have a unique feature or bonus package that comes with the purchase of an NFT. It’s possible that some merchants have an NFT release. Buyers may join a particular group, win actual things, and so on.
What Can Be Made Into An NFT?
Most NFTs have unique qualities and may be generated from any kind of digital information, such as images, art, music, GIFs, or a video clip. They are so adaptable that the NFT marketplace can even incorporate tweets and memes. NFT marketplaces that operate as auction houses have made trading in NFTs simple and provide guidance on how to sell an NFT.
Here are a few examples of things that can technically be classified as NFT:
Digital Artwork
Digital artwork is the most common form of NFT that we have seen so far. Artists may easily sell digital artwork by creating it on their computer or smartphone, then converting it to NFTS from a number of formats such as JPGs, PNGs and more.
Videos
Another often traded NFT is video snippets. On OpenSea, you may buy real-life highlights, classic movie sequences, and video art made by artists, in addition to real-life highlights.
Music
If you’re a creative with a musical bent, you may sell your music NFTs on sites like OpenSea, Rarible, Mintable, Axie Infinity Market, and others. Simply register on the marketplace and choose whether you want to manufacture a single collectable or a series of collectables. You can make a single collectable that yields one-of-a-kind NFT using only a single collectable. You have the option of releasing numerous copies of the same item if you have many collectables.
Games
You may also earn money by selling virtual avatars, video game skins, weapons, and even armour in-game. Gamers that amass a large number of rare gaming items over their time playing a certain game might sell them for a profit.
An example would be the Renegade Raider skin on Fortnite, which was only released one time back in 2017 and is estimated to have gathered some value since.
Memes
Tweets and memes, unsurprisingly, have a lot of value in the NTF world, as we’ve seen with a huge number of examples so far. Influencers are also generating money by developing memes and then selling them as NFTs.
Collectables
Because of the virtual exclusivity that NFTs provide, collectables such as playing cards, celebrity memorabilia, and more are particularly sought after since their worth yields premium prices due to their restricted quantity.
Physical Artworks
Artists may use the NFT marketplace to sell a digital duplicate of their physical work, such as pictures or paintings. Because NFTs are sold over a blockchain network, they assist to cut out the middlemen, allowing artists to interact directly with customers and reap the full benefits of their work. They may even create their own royalties to be paid out on future purchases.
Jake is a professional copywriter, journalist, and life-long fan of technology. He covers news and user guides for KnowYourMobile.
