How do NFTs accumulate and retain their value?

Unless you’ve been living under a rock for the past few years, you’ve probably come across the term NFT – short for non-fungible tokens – at least in passing. This new asset class has taken the internet community by storm, restoring power to artists and creators and providing a completely innovative type of investment.

While NFTs can take many forms, the most common is digital graphics. But where does the meaning of NFT come from , you ask, when it comes to an image or video that, theoretically, anyone can download to their device for free? Below we look at how NFTs accumulate and retain their value.

Ownership

First of all, NFTs are valuable because they signify actual ownership of a particular image, video, audio file, or other online media. While anyone can download a copy of the asset, none of these people own it. The owner of an NFT can prove beyond any doubt that the rights to the image belong to him, thereby giving him a status that was not previously in the digital world.

Authenticity

What’s more, the nature of NFTs means they can’t be faked or stolen from someone else. This is because every transaction associated with a given NFT is stored in an immutable online ledger based on blockchain technology that anyone can view but no one can tamper with. It is for this reason that counterfeits and fakes do not apply to the NFT world, so there is no possibility of repeating major scams such as when Internet persona Logan Paul spent $3.5 million on Pokemon cards only to find out they weren’t real. deal.

Community

While some of the value of NFTs is often associated with their aesthetic characteristics, they must have a strong community to support them or the whole enterprise will collapse. It is for this reason that NFT creators and distributors hold regular community meetings to connect with their fans and continue to instill confidence that the assets will continue to retain or accumulate more value.

Membership

Belonging to such a community not only gives you a warm, fluffy feeling inside. Often these groups can have tangible benefits in the real world. Take, for example, the Bored Ape Yacht Club. What started as a simple community trading digital art of various monkeys soon grew into an exclusive society where members can display their status, chat with each other, and even attend real-world yacht parties.

Royalty

Finally, NFTs are revolutionary in the sense that they have returned control and a legitimate source of income to their creators. Some NFTs contain code embedded in their blockchain ID that automatically redirects a percentage of any future sales and resales back to the original performer, giving them royalties for their work. This is not only a novelty in the online investment world, but also encourages creators to continue to promote and increase the value of their assets.

So you have it! Hopefully, you now feel a little more aware of the attributes and assets that NFTs carry, and maybe even confident enough to make your first purchase!

Leave a Reply

Your email address will not be published.