When you see or hear, that a lot of people are investing in NFTs, you wonder what is the point of buying NFTs, and Is an NFT a good investment strategy for you!
The NFT market has attracted some of the top industrialists, celebrities, and sportsmen from all over the world. Investing in Tokenized assets has certain advantages as each NFT project comes with some unique ideas and roadmaps that can offer long-term benefits.
Here in this article, we will go over the fundamentals of NFTs, how NFTs work, and some of the most popular uses of NFTs.
So, if you want to know whether an NFT is a good investment or not, read this article to the end.
What Is The Point Of Buying NFTs? All About Non-Fungible Tokens
Before thinking about what is the point of buying NFTs, you need to know what NFTs are.
NFTs or the Non-Fungible Tokens are digital assets with unique identification codes secured by Blockchain Technology.
For example, if you buy digital art, for example, the digital version of “Monalisa” painting or the digital version of a “Mozart Symphony”, you will have the digital rights over it. Yes, other people can see the painting or can even make copies of or enjoy the music, but the original version will belong to you and no one else.
How Do The NFT / Non-Fungible Tokens work?
If you can understand how the Non-Fungible Tokens work, it will be easier for you to acknowledge what is the point of buying NFTs.
NFTs can be minted directly from the websites or can be bought from the NFT Marketplaces after the public minting is done at the official website.
However, when the sale happens, you do not get the original version of the NFT, but you get the certificate of ownership. Everything happens under the security of Blockchain Technology. When you purchase an NFT, it will be stored in your digital wallet.
The Blockchain is like a database, keeping all the data of the transactions and the ownerships. But, unlike regular databases like Excel sheets, the Blockchain creates a chain of blocks and records all the activities within a shared digital ledger.
Being a part of a decentralized economy, Blockchain technology allows you to track each transaction and entry within the same network or blocks.
For example, several NFT marketplaces offer royalty to the creators every time their NFT is sold. So, through Blockchain technology, you will always be able to track when your digital artwork changes hand.
While being a digital asset, they cannot be confused with cryptocurrencies.
A particular cryptocurrency has a particular price at a particular moment. For example, as of 19th April 2022, the price of 1 Bitcoin is USD 40739.90. There are more than 18.9 Million Bitcoin and no matter where you are or how many you are willing to buy, the price will be the same.
But, when we talk about the NFTs, they cannot be traded with one another as they will never have the same price. Unlike cryptocurrencies, the price of an NFT depends on several factors (the most important factor is the Rarity). Even within the same project, the NFTs will have different values – and thus cannot be exchanged with one another.
Where Can You Use The NFTs?
What is the point of buying NFTs! – The ideal answer to that would be how you can use the NFTs, right?
We are merely witnessing the evolution of NFTs, and for now, you can use them on the following spectrums:
Use NFTs As Collectables:
If you like collecting unique items and adding them to your inventory, nothing can be more than investing in NFTs. There are thousands of NFT projects that offer unique artworks. Each NFT project has a community of investors and collectors.
So, by buying NFTs, you can collaborate with other collectors from all over the world – build your collection – and sell it later if necessary for a better price.
Use NFTs For Gaming:
If you are into gaming, the Non-Fungible Tokens have revolutionized the idea of play-to-earn games. There are several gaming NFT projects that allow you to play their games in the Metaverse, join the in-game economy and earn passive income from it.
Other Uses Of NFTs:
As NFTs offer proof of ownership and thwart any chances of fraudulent activities when buying luxury items. So far, this has greatly helped the Fashion industry to mark their items, but in the future, other industries can reap the benefits of NFTs too.
Is an NFT a good investment – Yes, because, its usability is not restricted to a specific circle – and in the future, we can see more mainstream uses of NFTs?
What Makes NFTs So valuable?
NFTs have become so valuable assets that not just the big-time investors, but common people are also looking to invest their money in them.
If you are still thinking about what is the point of buying NFTs, it is Authenticity and Rarity.
These days, it’s not hard to find duplicate products on the market. But as NFT is becoming more mainstream, the idea of authenticity is gradually increasing. With NFTs, you don’t have to worry about dealing with counterfeit items as they are secured by Blockchain technology and managed by Smart Contracts.
Now comes the Rarity factors of the NFTs. We always strive to find something that is unique, something one-of-a-kind. As each NFT is made with different attributes, the uniqueness will always be there – so the chances of gaining better ROI will never fade.
Conclusion – Is An NFT A good investment?
The best part of NFT investment is that it is accessible to everyone. No matter if someone is a big-time investor and has been investing in NFTs for a long time or someone who is looking to begin their career in NFTs with a small amount, there is a prospect for everyone in the NFT marketplace.
So, is an NFT a good investment? Is there any point in buying NFTs? – Yes it is
NFTs have surely defied the complications of our traditional finance system, so they can generate better ROI for you if you weigh the underlying value of your digital asset before investing.
Where To Buy NFTs?
A: You can buy NFTs directly from the website by participating in the minting process. If not, you can also buy NFTs from secondary Marketplaces.
The Top 5 NFT Marketplaces are:
- Enjin Market
Are NFTs A Safe Investment?
A: Like the idea of NFT is still in its infancy, the market is quite volatile. But if you stay updated with current NFT trends and do your research before buying NFTs, nothing can be a better investment plan than this.