Let's first talk a little bit about what an NFT is.
NFTs are a unique piece of digital asset, a “non-fungible”, so it means they can’t be swapped for something of completely equal value and because it’s non-fungible, their market value is likely to fluctuate.
NFTs are not a cryptocurrency but they are bought with cryptos such as Bitcoin, Ethereum or Solana and when you buy an NFT you get exclusive ownership of that particular digital asset (e.g., a piece of art, an in-game purchase, or a tweet).
NFTs have become increasingly popular as a form of digital art and collectable items. They offer unique advantages over traditional forms of art, such as being able to own a piece of digital art that is truly yours and can never be replicated.
What are these digital assets?
So far they’ve included:
Artworks
Tweets
GIFs
Songs
In-game purchases
Essays
Domain names
When you purchase an NFT, you buy exclusive ownership of a specific digital asset.
Why should I buy a NFT - non-fungible token?
Scarcity
NFT Scarcity means that as a unique piece of digital asset, a “non-fungible", the limited availability of a resource in comparison to the limitless wants. So people will be encouraged to buy a unique asset because other potential buyers will worry that it become a piece of asset that is rare and unique.
Collectability
NFT Collectability means that you can collect unique assets and even though there is a fluctuation in the market and the potential risks, the collection will have value depending on certain factors such as who is the artist, how rare the piece is, how much value the market had added, etc
For example, people bought Nyan Cat for $600,000, Jack Dorsey's first tweet for $3M, and Mike Winkelmann's (aka Beeple) NFT “Everydays: The First 5000 Days”for over $69 million.
What are the risks?
Remember: it is a high-risk investment.
NFTs offer a unique, high-stakes opportunity to make some huge profits but this only happens rarely.
The total value of NTF sales in the first quarter of 2021 amounted to $2 billion but there are some risks involved and uncertainties in the market that new collectors should consider before investing. The NFT market is super volatile, there is a risk of fraud and cyberattacks.
And the risk of buying an asset that won't increase in value (so you will lose money).
If you're considering buying an NFT, there are a few things to consider as the purpose of your purchase, whether it's for investment or simply to collect something you love. Additionally, you should research the artist and the platform they use to ensure that your purchase is legitimate and secure. Finally, it's important to understand the implications of buying an NFT before making a purchase.
Some Top projects
OpenSea is the world's first and largest NFT marketplace and hit a record-breaking monthly NFT Volume Captures more than $1.5 Billion in August last year.
Cryptopunks is one of the earlier projects of NFT and had hit a huge line in 2021. The crypto punks hit the market with 1 Billion dollar sales and its value has increased: the minimum value of the crypto punks was initially 30K in April, and now the minimum value of the crypto punk is more than 300K.
Decentraland is a virtual world game constructed in the Ethereum blockchain. Their NFT are represented as LAND and you can create your own avatar, monetize applications and content. Decentraland is a combination of VR based games and an NFT marketplace.
If you decide to buy NFTs approach the market with respect and fear: you do not want to lose your money in a sinking whale, a not so sparkle unicorn or an ape that doesn't gibber.
☝️Long Neckie Ladies is the NFT collection. Nyla Hayes is a 14 years old NFT artist that made history selling her collection for around 960 ETH.
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