What Are NFTs and Why Are They So Expensive?
The Non-Fungible Token is the latest up-and-coming trend. With NFTs, you can gain ownership of any asset-related data. You can also prove that you own this certain digital asset or take a picture of it and store it with an application like CryptoKitties and prove your ownership that way. This post will discuss all the NFTs, and why they are so expensive, so you have an idea before investing in them. So let’s start
What are NFTs?
NFTs are nothing but Non-Fungible Tokens. An NFT is a virtual token that regulates and enforces programmable ownership of assets. Assets can be anything, such as in-game items, tickets, digital art, and other collectibles. The word Non-Fungible denotes that no two assets are the same. Take, for example, gold coins of different minting years or limited edition artworks. They are considered fungible because no two of them are similar. To distinguish and work with them, they require a serial number that acts as the identity. Similar to how the identity is used on paper money, in the case of digital assets, it enables participants to determine how much they are worth and allows them to verify if they’re authentic.
Why Are NFTs So Expensive?
So, let’s see why NFTs are so expensive. First of all, it’s the non-fungibility of each of them. I mean, there can be a limited number of copies of his art but only one original piece. That is what makes the original painting valuable and irreplaceable.
NFTs are different from cryptocurrency as they are used to purchase valuable products. You can exchange cryptocurrency to purchase valuable products, so they are fungible that way. NFTs are not fungible, and that is why they are such a huge investment tool.
Other factors that make NFTs such valuable investments are utility, ownership history, underlying value, buyer perception, liquidity premium, and future value.
How Are These NFTs Created?
Creating NFTs is one of the people’s main ways on the blockchain. Anyone can create an NFT and sell it for a small price. If someone requests a specific piece of art, a musician can get paid by creating a song; a movie studio can make extra money off their existing catalog of movies by turning them into NFTs. New content is constantly being added to the blockchain, thus expanding its universe.
The digital art space has become a big business, and online marketplaces such as Rarible, Ethereum and SuperRare, NFTsAirDrops are driving the new economic model of artists. These digital marketplaces allow creators to upload NFTs they have created using blockchain technology that cannot be changed or copied. These tokens can be bought and sold on the marketplace like stocks.
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