As you enjoy your comfortable condo living, you may have heard and read a lot of buzz about NFTs here and there- in social media, in podcasts, ads, and such. There has been an explosion of non-fungible tokens (NFTs) during the past years. Everything from digital art and music to in-game items and digital collectibles is selling, with prices reaching into the millions. Even collections of selfies are also sold in the NFT market.
Is the hype around NFTs worth it? Some experts believe they are on the verge of popping. Others feel that NFTs are around to stay and that they will transform the landscape of investment forever.
Your sudden exposure to NFTs and the various concepts that surround them may raise a slew of questions in your mind. This handy guide will guide you over everything you need to know about NFTs, from how they work, how they're unique, how they get their value, and whether they are smart investments.
What is an NFT?
NFT means non-fungible token. An NFT represents a real-world item, such as artwork, music, goods, and films as a digital asset. They may be purchased and traded online, frequently with cryptocurrency.
Even though NFTs have been present since 2014, they are just now becoming well-known due to their rising popularity as a means of purchasing and selling digital artwork. As of November 2017, $174 million had been spent on NFTs.
How is NFT different from Cryptocurrency?
A cryptocurrency is "fungible" since it can be traded or exchanged with another and they have the same value, with one Bitcoin costing exactly one Bitcoin. Cryptocurrency's fungibility makes it an accepted form of payment on the blockchain.
NFTs are unique- they are non-fungible. Each NFT has a distinct digital signature that prevents it from being exchanged for or compared equally to another NFT. Rather than purchasing a real thing like a painting or an antique, you pay for a file and confirmation that you own the original copy.
What are NFTs for?
What are some examples of NFTs?
Anything digital may be an NFT, but the items that are most valuable right now tend to be tied to the arts. There have been in-game items and NBA slam dunk footage that have sold, but for the most part, right now, digital art is taking over. Some of it is even fetching prices higher than that of "real world" artwork.
NFTs and blockchain technology provide artists and content producers a new chance to monetize their crafts. Artists don't need galleries or auction houses anymore for selling their work. Since it's an NFT, the artist may sell it to the public and keep all of the money.
Digital artist Mike Winkelmann, better known as Beeple, is well recognized for creating the highest-selling NFT of all time. His work, Everydays - The First 5000 Days, was sold for $69 million in 2021 by the renowned New York auction house Christie's.
Free internet availability and ease of copying make digital art difficult to monetize historically until NFTs arrived on the scene. With NFT's unique signature tied to digital art, art is identified as genuine, original, and artist-endorsed.
Digital art is not the only NFT. NFT can be:
- Digital Collectible
- Domain Name
- Event Coupon
- In-game Item
- A Sneaker Design
- Personal Memorabilia
NFTs can get creative too. It can be odd, wild, and can push the limits of our understanding. The founder of Twitter, Jack Dorsey, sold his first tweet for over $2.9 million. The remarkable Nyan Cat video was sold for about $852,300. The iconic meme Bad Luck Brian was sold for over $36,000. And by the time you are reading this, the internet will have a whole new batch of wacky new NFTs to sell.
What Gives NFTs Value?
The NFT price reflects its actual value in the real world if the asset is tangible property. If, on the other hand, the asset in question is a digital piece of material without a pricing label, its worth is essentially speculative. Generally, the market, supply, and demand all have a role in determining its worth. NFTs are only worth what the market is willing to pay for them. This is a wager that someone will be willing to pay more than what you paid for it.
An NFT's value can begin at the smallest conceivable price. You may anticipate great things to happen, though, if buyers are keen to pay bigger amounts. Bidding could go as high as you can dream as long as demand for the asset or NFT is strong in the market.
Hence, NFTs that don't have their pricing fixed to a real-world asset has the potential to soar to new heights. These NFTs can far exceed the wildest hopes of original sellers since their value is determined by how much purchasers are willing to pay.
Should you buy NFTs?
Cryptocurrencies and NFTs have the potential to let more individuals participate in the digital economy. If you're an artist or content creator, selling digital assets could be a good idea. However, purchasing NFTs only for the sake of collecting them is a speculative investment. The value of a piece of work is uncertain and is determined by the demand for it. It's impossible to predict which collectibles will rise in value and which ones will fall in value based on a single criterion.
NFTs, like cryptocurrencies, are essentially unregulated. An NFT can be created and sold by anybody, and its value is not guaranteed. If the hype calms away, losses might pile up.
NFTs are still in their early development. Even if it's an exciting new frontier in the realm of technology, investing in a new movement comes with significant risks. Research about NFTs thoroughly and remember to diversify your assets so that no one asset may sabotage your wealth-building efforts.
That said, shall you decide to invest in NFTs, do your homework, understand the risks—including the possibility of losing all of your money—and proceed cautiously just like you would in any investment endeavor.
If you are thinking of investing in real estate instead of NFTs, check out Vista Residences!
Vista Residences is the condominium arm of the country’s largest homebuilder, Vista Land & Lifescapes, Inc. that offers ready for occupancy and pre-selling condominium projects in Manila, Makati, Mandaluyong, Quezon City, Ortigas, Baguio, Cebu, and CDO that are strategically located within major cities, in close proximity to premium universities, transit-oriented locations, and developed business districts.
For more information on Vista Residences, email [email protected], follow @VistaResidencesOfficial on Facebook, Twitter, Instagram, and YouTube, or call the Marketing Office at 0999 886 4262 / 0917 582 5167.