The NFT token is the latest news in the world of cryptocurrencies these days.
They are interesting to both collectors and fans of cryptocurrencies, but does this trend have a future?
In other words: Do you need to spend real money to invest in digital art?
What is an NFT token?
NFTs or irreplaceable tokens are a type of cryptocurrency created on a smart contract platform such as Ethereum.
These are unique digital objects that you can own or even trade profitably.
Think of them as digital collectible cards.
If you choose them well and buy them before they become popular, you have the opportunity to make a lot of money.
Why does an NFT token have value?
Of course, before you buy something, you’ll probably want to know why it’s worth buying.
In fact, why would anyone buy NFT tokens and why would the next customer ever be willing to spend even more money?
Ideally, the value of NFT doesn’t just come from the digital hot potato game, where you buy something in hopes of selling it later for more. And so on, until the whole thing collapses. Ideally, NFT should be valuable to you because you like it. If you’re a fan of the NBA League, you might want to have an official NFT that represents your favorite player. Or, maybe there is a digital cat that you really like.
Certainly, in a way, many NFTs are just a digital image that you can easily right-click and save to your computer. But NFTs are also on the blockchain, which makes them extremely difficult to truly copy in their entirety. The entry in the blockchain also transparently tells who created the NFT. If a famous musician says, “Yes, that’s my address in Ethereum that created this digital image of a cat.” Then it can be checked on the blockchain.
Let’s go back for a moment to that digital hot potato game. NFTs are a newly created space and a lot of scams are happening. You may see that a certain NFT sells for millions and you think you will also be able to buy something for a few dollars and get rich by selling it to someone later. It can happen, but it is rare.
And these things can be manipulated. For example, owners of large amounts of cryptocurrencies can buy many NFTs and then “sell” them to themselves for millions (its other cryptocurrency address), artificially inflating the price. So be careful: Just because some NFTs have been traded for a lot of money, don’t think that automatically means that all similar NFTs are valuable.
What usability opportunities do NFT tokens provide?
The market for collectibles is expanding in all kinds of directions.
One of the main avenues is art collection. When an owner wants to sell a work of art, he can simply list the NFT token at auction as proof that he is the real owner. This type of certification digitizes the process of origin and prevents counterfeiting and fraud in the art world because ownership of art property exists on the blockchain.
The same could be done for baseball cards, stamps, jewelry, autographed guitars or any collectible item you could imagine. Blockchain security guarantees the legitimacy of the transaction.
2. Online games
NFTs are revolutionizing the gaming world. Characters in games often acquire replaceable items such as weapons, clothing, and even property. Creating NFT tokens for these assets makes them interchangeable for in-game tokens or even real money. As a result, entire Internet economies for digital goods have emerged.
Traditional multiplayer video games, and even casinos, are also beginning to use NFT tokens. They realize that blockchain tokens allow players (and companies) to extract real value from playing online games.
If I have a ticket to see Barcelona play against Manchester United, and you have a ticket for your local high school basketball game, these are similar items, but they have wildly different values. Both will grant access to the event at a specific time and place, but are unlikely to be transmitted.
That is the essence of NFT. It standardizes ownership of a particular category of assets, but assets within that category can have very different market values. Ticket sales are a great opportunity for NFTs to revolutionize the industry.
4. Identification and certificates
Things get really interesting when we consider identity checks and the role that NFTs can play in verification. You could get a digital token as a birth certificate, passport and driver’s license. Of course, you would not be able to trade these tokens, but the state could check the accuracy of your data. You could also voluntarily share this information with employers, doctors, or anyone else who needs your personal information.
Maybe you could get a university degree as a digital token. You could then request an examination of your doctor’s NFT if they have completed medical school, exams and other relevant information. In addition, information that companies typically collect about you, such as browsing history or purchasing preferences, may be tokenized and then kept private or sold at auction to monetize the personal economic information you create.
How to trade NFTs and where to store them?
Buying and owning NFTs is not like typical cryptocurrency trading. To buy digital collectible or tokenized assets, you will probably need a digital currency like Etherium, although some sellers may accept cash.
You will also need someone to do transactions with. Because each token is unique, there are no exchanges for NFTs. Instead, there are markets that connect individual buyers with individual sellers. You will need to determine the price with the person selling the token. You can then buy it directly from them.
If you buy an ERC-721 token, it will go to the address of your Ethereum wallet just like an ERC-20 token. However, a review in the wallet client will not tell you anything about its value, just keep it. Its value comes from any system in which the token is located. For example, CryptoKitty NFT is associated with a drawing of a cat with certain attributes and that cat can be listed on the open market if you choose to sell it.
The Future of NFT Tokens
Once you start thinking about the possibilities of NFT tokens, it’s hard to find a theoretical limitation of the things that NFTs could digitize.
It’s more than crypto art tokens – NFTs can represent your identity, qualifications, real assets and all sorts of digital collectibles, all on a blockchain. These tokens can be stored, shared or sold.
NFTs enable transactions and current transactions with anyone in the world, and companies can manage entire inventory using digital tokens. NFTs are the foundation of the future economy.
Are NFTs a good investment?
Buying NFT because you like it or want to earn (or lose) a few bucks is one thing. But investing in NFTs is another. Again, this is a newly created space. Even Van Gogh’s painting or Babe Ruth’s rare baseball card took some time to become very valuable.
Given the digital nature of NFT, it is difficult to compare them to prized physical works of art, such as statues and paintings. On the other hand, we live in a world where one Bitcoin is worth more than $ 50,000, so things from the digital realm can certainly be very valuable, and even maintain that value over long periods of time.
Anyway, if you are planning to invest in NFTs, you will have to dive deep into this complex world because every NFT market is a little different. It’s also expensive – trading on Ethereum can be quite expensive as recent network congestion is causing fees to rise. You will need to think strategically and follow the rapidly changing cryptocurrency trends.
In short, it is possible to make money by investing in NFTs, but you will have to research everything carefully. Find out more on www.5995.io