NFTs, are a term that has been reiterated in people’s minds in recent years. NFTs might be the newest sensation in the real world and digital world as well. The most captivating phenomenon with NFTs is the price at which they have been sold and are continuing to be sold or traded. There NFTs of projects such as CryptoPunks, Bored Ape Yacht Club, Azuki, etc have been sold for mind-blowing prices reaching up to thousands and millions of dollars.
This is leaving the populace puzzled as to why the NFTs are being sold for such astounding prices. Additionally, what makes NFTs so valuable, and what sets them apart from other digital assets?
What is NFT?
You could at first be confused by a non-fungible token, also known as an NFT. Let’s concentrate on the first word, “Non-Fungible,” since it will be simpler to understand. The definition of a fungible item is one that can be replaced by another thing that is the same or comparable. Ethereum is fungible, just like the money we use and cryptocurrencies like Bitcoin. Therefore, “Non-Fungible” refers to something that cannot be replaced and is singular.
As a result, Non-Fungible Tokens, or NFTs, are data that have been recorded on the blockchain, a type of digital ledger. These data can be found in a variety of formats, such as artwork, audio, avatars, etc. These facts are incomparable and unchangeable since they are non-fungible.
What makes an NFT valuable?
As you are aware of what NFTs are, let’s go over what makes NFTs valuable. NFTs are non-fungible, meaning that it provides the asset with authenticity as they cannot be replicated. There only exists one unique NFT. So, NFT has facilitated the digital market with authenticity and rarity.
When you buy a particular NFT, you are not just buying it, but you are owning only one piece of the unique digital asset. So, if you buy an NFT you are purchasing a token that will always identify a certain digital asset that is inscribed on a blockchain. NFTs not only cover art but music, videos, game assets, virtual land, and many more aspects.
These digital assets when purchased cannot be owned by anyone else but you. With NFTs even if there is a fake copy somewhere, the unique and original piece will always be with you. There exists only one NFT like that, and it’s one of a kind. Therefore, all this makes the value of an NFT extremely high. Similar to art pieces such as the Mona Lisa, there is only one of them, making it unique and making it valuable. There might be copies of the painting, but the worth won’t ever come near to the original art’s value.
There is also another criterion by which the value of an NFT can increase. NFT projects offer a lot of utilities or benefits to NFTs as well. With utilities, an NFT can become more valuable and adds authenticity to it. NFTs can come with a lot of utilities such as exclusive memberships, meetups with the developers, access to metaverse games if the project has one, donations to charity, and many more innovative utilities. All this makes the NFT more valuable.
How are NFTs made?
The process by which one makes an NFT is not a difficult one. Any artist, musician, brand, etc can make their outputs and can embed them in a blockchain such as Ethereum, or Solana and start its sale. This is simply known as minting. The NFTs can be added to any NFT marketplace and to gain compensation every time it is sold attach a commission to it or simply to receive a royalty.
Although there are transaction fees known as gas fees along with a trading fee. With this, the transaction of an NFT can become expensive.
Should I invest in NFT?
A simple answer to this is yes. You should invest in NFTs. They are extremely beneficial in non-fungible nature and hold great utility for the future. Although, before investing in an NFT project you must scrutinize the project with the utmost attention. The NFT must have great utilities which promise a long run into the future. Also, look into the developer of the NFT and see if they are in for the future or just for the spur of the moment.
Although NFTs have great potential in them, you must research thoroughly before investing in one, as some projects might be to grab the money only and not provide anything for the investors.
Wrapping it up, NFTs come with a horde of beneficial values which can be implemented in several aspects. NFTs can be used to represent art, music, and many more. It also maintains the originality, authenticity, and rarity of the asset. With NFTs, the information of your digital asset will never be lost as it is embedded in the blockchain. So, NFTs are valuable.