The Basics of NFTs and why They are Worth Investing In
NFTs are rapidly increasing in value for good reason. Some NFTs, short for non-fungible tokens, are selling for upwards of $60 million. However, if you are like most people, you aren’t exactly sure what NFTs are and why they are so important in the context of investing.
The Roots of NFTs
NFTs have been around since ’14. However, these digital pieces of art didn’t spill over into the mainstream until ’20. NFTs have built up even more momentum this past year, setting the stage for them to reach higher valuations in the year ahead. In short, NFTs have value as they are non-fungible, meaning highly unique pieces of digital art that only one person can own. In contrast, traditional currency is fungible as it can be replaced by other currency with the exact same qualities.
The blockchain that support Bitcoin is used to track ownership of NFTs. The use of the blockchain is important as it reinforces the security of NFT ownership, purchases and sales. There is the potential for NFTs to disrupt all sorts of different markets moving forward, ranging from the art market to sports, insurance, gaming and more.
Artists Love NFTs
Artists around the world are embracing NFTs. The endorsement from artists provides these digital creations with that much more legitimacy and value. NFTs appeal to artists as these digital collectibles provide creative individuals with heightened autonomy, meaning control.
The rise of NFTs eliminates the middle man that is the art gallery. Digital artists can create beautiful pieces of art and sell them directly to buyers without paying a fee to an auction house or other business that stands between them and paying customers.
Are NFTs the new Trading Cards?
Those in the sports world and trading card industry are especially interested in NFTs as they have the potential to replace conventional sports cards. Indeed, NFTs are akin to digital trading cards yet they are not exclusively focused on sports. NFTs certainly feature player highlights from the top sports leagues in video form yet they can also include players still-shots, artful images, GIFs and plenty more. In other words, NFTs are likely to become just as collectible or even more collectible than traditional sprots cards.
Why NFTs are Worth Investing In
NFTs are valuable digital assets largely because they cannot be copied. Think of NFTs art as similar to Monet paintings and other highly idiosyncratic items that collectors and investors desire as a component of their portfolio. Add in the fact that NFTs look cool and they have that much more appeal.
Investors should think of NFTs as a modern, digital form of art that have the potential to exponentially increase in value as society rapidly transitions to a digital way of life. Though most NFTs do not sell for millions of dollars, some are selling for tens of millions. It is quite possible an NFT you buy for hundreds or thousands of dollars will exponentially appreciate in price as time progresses.
NFTs are not limited to pieces of digital art. NFTs also include tweets, songs, GIFs, domain names, essays and even purchases within games. The scarcity of these digital items is part of their appeal. An NFT cannot be copied, meaning it is scarce. The rarity of an NFT heightens interest all the more, potentially to the point that it is worth a considerable sum of money. The fact that only one owner can claim ownership of an NFT makes it that much more scarce.
Buying Your First NFT is Easier Than You Might Think
Buying an NFT requires the creation of a digital wallet. The digital wallet is used to hold your cryptocurrency and the NFTs. You can find NFTs on several platforms such as OpeanSea. Search for an NFT that catches your attention, purchase it with crypto, hold it until it appreciates and you just might make a tidy sum of crypto when the time is right to sell.