NFT (Non-Fungible Tokens) | Taking the Crypto Space by Storm
NFTs (non-fungible tokens) are emerging as one of the most lucrative investment options backed with blockchain. Discover more about the phenomenon.
NFTs (non-fungible tokens) are taking the cryptocurrency world by storm. They facilitate content creators/owners to monetize scarce images, sports collectibles, contracts, tweets, videos, and whatnot for millions of dollars. Recently, for instance, digital artist Beeple auctioned an artwork for approximately $70 million. In another example, Jack Dorsey, the CEO of Twitter, put his first-ever tweet for auction as an NFT token. The top bidder bought it for nearly $2.5 million. So, what are non-fungible tokens and why are people investing millions of dollars in this emerging crypto phenomenon? Let’s find out.
What are Non-Fungible Tokens (NFTs)?
NFTs are cryptographic tokenized representations of unique tangible and intangible assets powered by blockchain and smart contract technology. The underlying blockchain technology renders them secure, authentic, and traceable. Content owners invest in NFTs to monetize almost anything unique ranging from collectible virtual sports cards, real-estate assets, and digital sneakers to cars, drawings, music, or image rights.
What can become an NFT token/collectible
Fundamentally, the use case range for NFTs expands beyond conceivable. Anything unique with provable ownership can be an NFT token or crypto collectible. The following are a few examples of NFTs.
- An artwork
- A limited-edition of sneakers
- A rare in-game item
- A piece of content
- A sports collectible
- An event ticket
The Importance of Scarcity in NFTs
A creator of an NFT gets to decide the supply (or scarcity) of a tokenized asset. For instance, a creator can choose how many NFT replicas of an asset can exist. These can be exact replicas, such as 1000 copies of an image. Also, the creator can create only one NFT as a rare collectible. The scarcity of NFTs is a crucial aspect that facilitates massive investment potential in them.
Investing in NFTs
Essentially, the investment opportunities provided by NFTs stem from their uniqueness and irreplaceability. One NFT cannot be interchangeable for another NFT or digital asset, thus, making it a one-of-kind. Due to this scarcity and their resale value, they have become quite popular among crypto and NFT collectors and investors. Investors pay enormous amounts of funds to get their hands on these NFTs. It is similar to purchasing traditional pieces of fine art. However, instead of holding on to them, selling these assets to the highest bidder generates significant gains on investments.
How to Enter the NFT marketplace?
Businesses and individuals, including sportspersons and sports clubs, can create, buy, and sell NFT tokens or crypto-collectibles on online marketplaces for NFT investments, like blocsport.one and nftdeals.io. Users only need to visit these websites and then follow the instructions to enter the NFT market.
Users need to visit these dedicated platforms and upload their files. Then, the platform transforms them into NFT tokens. Here, NFT owners can also include specifications like a description of the work or image rights and expected pricing. They can attach metadata or attributes related to an NFT asset. For instance, an artist can sign its digital artwork with a signature in the metadata. Once the NFT is live on the platform, it is ready for buyers to invest.
The Future of NFT
As reported by Al Jazeera, in 2020, NFT sales crossed the mark of $250m while the all-time investment reached about $534m. In 2021, these numbers can go even much higher, given the recent buzz and increasing interest of renowned celebs, sportspersons, companies, and more in NFTs. The NFT market is volatile and nascent. However, the significant potential they offer makes them a viable, long-term investment option.