What makes NFTs so valuable? We explore why NFTs are Worth buying and share multiple reasons for making them valuable to others.
Our collector’s guide explains why anyone would buy their first NFT, what non-fungible Tokens get used for, and examples of how they can change the future as we know it.
Let’s dive in:
Why are NFTs worth it?
In short, NFTs have higher returns than traditional financial assets. NFTs as an alternative investment have more volatility. However, they tend to outperform traditional asset classes.
The price of an NFT largely depends on how to scare the token is and the aesthetic. Yet, collectors benefit from having NFTs regarding financial returns and the emotional dividends from collecting them.
Additionally, NFT collectors who invest in these digital collectibles are more acceptable with the extremely high volatility.
Studies show “the average of monthly returns on NFTs is 27.76% (16.99%) based on the arithmetic (geometric) estimation method, outperforming most traditional financial assets.”
And transaction volumes aren’t slowing down either; in fact, they are increasing. “Transaction volume on OpenSea surpassed $14 billion in 2021, up by a factor of 646 compared to 2020.” according to Crypto Briefing. As a result, OpenSea Saw a 646x Increase in Trading Volume in 2021 – Crypto Briefing.
Also, NFTs use crypto coins as the currency for selling, buying, and trading them.
Additionally, we analyzed 100 of the top crypto coins in January 2022. It shows 41% of the market cap is with Bitcoin, and 20% is with Ethereum, making up 61% of the overall crypto market. So, makes it even more important to have these crypto coins in your portfolio and NFTs worth these crypto coins to help keep that value.
If you’re trying to understand what makes an NFT valuable, it comes down to digital scarcity, which creates demand and increases its value after launch. However, it’s not the only reason why nfts are worth more and have become so popular.
Let’s dive in
9 Reasons Why Anyone Would Buy An NFT
Most non-nft collectors ask how a JEPG can become worth millions, and there are numerous reasons.
NFTs give artists and creators ownership, control, and financial reward. It’s a technology that has the potential to revolutionize how you can own ‘digitally assets’ and create ‘digital scarcity.’
While a JEPG can get copied, NFTs cannot get copied.
Some believe that NFT investing became popular due to making traditional investing more modern and exciting.
Traditional investing has been complicated or tedious, and NFTs within the crypto space became a way to gamify the financial industry for millennials who were improving their financial literacy.
1. Emotional Dividends
Getting your first NFT has a special feeling, and then becoming a part of a community that’s supporting the nft project as a whole brings even more joy. In addition, NFT collectors find satisfaction in building their collection, whereas NFT flippers focus on best profit by flipping these digital assets.
It’s fun to find new nfts that you haven’t seen before and share them with your friends on social media when you mint them. It’s also exciting to hunt for nfts that others haven’t discovered yet.
Personal interest influences how valuable a digital asset will be and if a collector will hold, sell or trade the nft after they mint it.
Imagine being a part of an elite group or exclusive community, which generates high levels of respect and fosters new connections. For example, CryptoPunks only has 10,000 digital collectibles available, and their cost is significantly higher than most can afford.
Blockchain play-to-earn games become available to collectors who obtain an NFT or stake their tokens on the blockchain network the game is running on. Those seeking nfts want access to these games or exclusive memberships others can’t be a part of easily.
Our physical lives continue to become cluttered with unnecessary purchases or liabilities such as cars, houses, watches, etc. On the other hand, our digital lives are becoming more valuable, which inspires the need to accumulate digital things.
Proving you are the owner of a digital asset changes the entire internet and our digital environment within our social groups.
Each nft records all metadata, IDs, and transaction history. It makes every non-fungible token unique and one of a kind. An nft cannot get copied in any way or for any reason. Additionally, it’s impossible to change any information on an NFT already minted, and it will remain that way forever.
Gifting or trading nfts to others allows creating an economy that’s active and engaging continuously. Imagine when the metaverse can allow users to transfer their digital assets through different metaverses.
NFTs are significant components in fraud prevention, and this technology removes any concerns around purchasing counterfeit items. Logan Paul bought 3.5 million fake Pokémon cards; imagine how that must have felt when losing money due to scammers. NFTs do not have scandals because each digital asset is identified, verified, and tracked.
The digital ledger acts as a record of all financial transactions which anyone can look up your purchases and what’s in your digital wallet. It quickly looks at others’ nft collections and encourages safe blockchain activities.
Every node in the network can confirm and trace the trades, and all you need is an address to a wallet to see what’s been in it or what’s currently in it.
What are NFTs used for, and who buys them?
The primary use case for NFTs is selling, buying, authentic, or creating digital artwork. Digital artwork can be videos, photos, tweets, virtual trading cards, and more.
It expands into more industries, such as virtual or real-world real estate and video gaming for skins or in-game rewards.
Businesses, consumers, and communities use NFTs.
Here’s a list of who uses NFTs
- Photographers – taking their photos to the next level by minting on a blockchain.
- Entrepreneurs – encouraging super-fan perks like exclusive access.
- Collectors – sports trading cards and digital collectibles becoming tangible.
- Investors – treating it as an alternative asset class when stocks or bonds are volatile.
- Artists – share their artwork on a new medium and get paid for their art quickly.
- Graphic Designers / Illustrators – drawing comics or digitally painting exclusively for holders.
- Marketers – building a sense of belonging and community with their most ideal customers.
- Realtors – used to improve efficiency when closing deals on homes.
- Celebrities – launching nft projects to their followers and growing their audience loyalty.
- Influencers / Youtubers – getting involved early to stay competitive and build a metaverse.
- Musicians / Singers – minting their music on the blockchain with no need for a record label.
How NFTs get used currently (Examples)
- Digital collectibles like trading sports cards
- Marketplaces selling NFTs creating micro-economies
- Records of ownership for in-game items
How NFTs will get used in the future (Examples)
- Purchase domain names as NFTs
- Purchase Tickets to live events as NFTs
- Registration of deeds for houses or cars as NFTs
- IP protection while waiting for the government to grant more formal protection
How will NFTs change the world?
NFTs will become a part of everything we touch and do. Imagine only getting access to a place once you’ve purchased a Non-Fungible Token on the blockchain. Gary Vee’s launching the first-ever restaurant to be exclusive private dining after holding an NFT.
Gary Vee already had 350 digital tokens on pre-sale and 1,534 tokens reserved for VCR group ownership. Flyfish Club | Home
The future is here with NFT’s and how smart contracts provide the right technology to create engaging social experiences between the physical and digital worlds.
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