NFT investments have become a new way of wealth creation for digital creators, physical goods sellers, and artists. NFTs, also known as non-fungible tokens, have been booming and show no sign of slowing down. The tokens represent digital ownership of many intangible items, which is why most individuals are shifting to this investment, especially in this era of technology.
Although NFTs have been around since 2014, it was until 2021 that the market broke and let the technology into the mainstream. The sales were approximated at $25 billion in 2021, which was quite a shocker considering the previous year’s sales, estimated at $94.9 million.
With the tremendous rise in demand for digital tokens, you must be wondering if they are a worthy investment. This article explains some benefits and reasons why NFTs are a good investment.
Ownership and Safety
The first benefit of non-fungible tokens is indivisible ownership. A single token cannot be distributed among different owners, so investors are assured total ownership and control.
Moreover, the tokens are on a blockchain network, which guarantees an extra layer of protection. The network ensures a single account for each token and protects owners from fake NFTs concerns.
Some individuals are still skeptical about NFT investments because they argue that one can take photos of the tokens and sell them. Sure, frauds can have images of NFT, but they cannot access the actual asset. Therefore, investors must conduct due diligence first before buying the tokens. They should verify ownership of the assets and have the seller transfer them to their account before transferring payment. The best part is that transferring token ownership is seamless with the blockchain network. So the seller will have no excuse.
You Can Verify Authenticity
The most outstanding aspect of NFTs is their uniqueness. Unlike fungible tokens like bitcoins, NFTs cannot be exchanged or replaced for other identical tokens with a similar value. The non-fungible tokens are ruled over by smart contracts and verified using blockchain to give owners proof of authenticity and ownership.
Experts believe that with this feature, NFTs can be used to change digital interactions, especially for content creators. Musicians and other entertainers can monetize their artwork in the form of digital collectibles without depending on art and gallery show to sell their content.
Even better, since NFTs are still scarce, the token’s creators have the privilege to issue only a specific number of tokens to maintain the scarcity of supply. This keeps the demand higher than the supply, thus minimal chances of market failure.
Furthermore, the blockchain technology where NFTs are stored ensures immutability. This makes the tokens immune to removal, replacement, and modifications. And from all these, non-fungible tokens can easily prove their authenticity as their most outstanding and valuable quality.
NFT creators aim to provide a seamless NFT investments process for everyone. They also want to ensure that buyers are protected from fraud by offering an easy transfer of the token from the blockchain network to the buyer’s account. It’s easy for buyers and sellers to trade the tokens freely on specific markets, especially with an extensive range of available trading options. This will go a long way to eliminate the issue of walled gardens in gaming.
For instance, some games offer in-game items that gamers buy to improve their gaming experience. Nonetheless, some in-game items have limited use and can only be applied when gaming, making them less valuable. Moreover, if specific games go out of trend, players will lose their in-game collectible investment.
Things get better with NFTs that let players hold the in-game items in their digital wallets. In return, gamers can use the items outside the game. They may even sell them to make profits, thanks to their transferability. The tokens are governed by smart contracts that facilitate the transfer of ownership digitally, provided the buyer and seller meet the terms and conditions of the agreement.
Potential Value Increase for More Profits
With the rising demand for NFTs, their value is expected to rise. Subsequently, if you decide to get into NFT investments, or resell your assets, the chances are that the resale price will be higher than the original purchase price, making the tokens a perfect source of profits.
The value of digital assets is based on how individuals perceive them. With the way things turned in 2021, nearly every investor now wants to get a piece of this asset. And owing to the scarcity of supply, NFTs might be regarded as the most precious asset.
Besides supply, other factors such as who is releasing the tokens will dictate the value of NFTs. The tokens will be more appealing if they come from a well-known and highly reputable company.
Another important aspect is the tokens’ versatility. NFTs can be used for various purposes like games and art, which adds to their value.
Some NFTs can be generated from any form of digital information like video clips, images, and music. The token marketplace can even incorporate memes and tweets. This has made trading NFTs an easy and enjoyable experience that anyone would love to be associated with. Such simple factors make a significant difference in how fast the value of NFTs rises.
Access Bonus Content
Art and music is not the only thing you get from investing in NFTs. You also gain access to a scope of exclusive content that you cannot get elsewhere. For instance, NFT creators may invite investors to events, where you get the chance to meet your favorite digital investors and learn helpful tips that could change your trading game.
NFTs Create Economic Opportunities
NFTs are slowly penetrating the digital content domain to bring in feasible money-making opportunities for content creators. NFT investments will enable creators to earn more on their content as well as the publishing platforms.
For example, a content creator publishing their content on social platforms helps those platforms make money through ads. And while the artists get exposure on social media, it does not allow them to make money directly.
Non-fungible tokens are here to create a better and more sustainable economy for content creators. This will eliminate the need for artists to publish their work on platforms that don’t earn them money. Instead, the ownership of their art content will be integrated into the content, so when they make a sale, the funds go directly to their accounts. The NFT creators will benefit from this through royalties for each resale by creating smart contracts since every NFT Metadata has the creator’s address. From this, everyone in the NFT circle, from the creator, to the seller and buyer, has something to gain.
NFTs Promote Inclusive Growth
These digital tokens offer unmatched support for inclusive growth. For starters, anyone can invest in NFTs. The token brings creators from different niches into a single ecosystem that helps them grow and improve their skills. The creators get to enjoy the actual value of their work and a chance to interact with their fans directly.
Finally, we can say that NFTs are good investments, the above benefits of NFTs explain why investing in non-fungible tokens is a good idea. NFTs are certainly the next big thing in the digital space with good selling points. The tokens are designed to fit every investor’s needs, but you must conduct due diligence and learn more about how the cryptos work before you go all in. Study the risk and limitations, then weigh them with the pros to make a sound decision.