NFTs, or non-fungible tokens, are emerging as the next big thing in digital currencies. NFTs have endless possibilities and can be applied to several industries, including collectibles, gaming, the art world, and more.
NFT art copies the world of art galleries, museums, and stores without the interference of any costly or perilous mediator.
A non-Fungible Token or NFT is a unit of data (code) on a digital ledger called a blockchain. Owning an NFT means that individuals own a unique digital asset.
Unlike cryptocurrencies, NFTs are not interchangeable and represent something unique like crypto-kittens, art, video game items, real estate, etc.
This means that unlike Bitcoin or ether, where one blockchain token is equivalent to any other, NFTs are all unique from one another due to the way they are programmed.
Is NFT Art A Good Investment?
Yes. NFT art is truly a good investment because of Collectibility, Contracts, Tickets, Trust and Transparency, Authenticity, Scalability etc. The main reasons that can prove the usefulness of investing in the NFTs are as follows:
1. Collectibility
NFT art is a collectible digital asset that is backed by blockchain technology. Initially, the NFTs were primarily presented as art collectibles.
NFTs added a ‘proof of ownership’ aspect to the collectibles industry. With NFTs, you can always check whether a collectible is real or not, as they are constantly tracked from the time they were created.
Now, let’s see digital vs. physical collectibles:
- Digital Collectibles: Before NFTs, the term digital collectible had no technical significance. The nearest things known were verified social media checkmarks and video game skins. But their owners could not be proved. Now, with NFTs, it has become possible to prove digital items’ ownership because of the involvement of blockchain technology in the process.
- Physical Collectibles: It is often wondered how the collectibility aspect of physical collectibles is influenced by NFTs.The answer is simple, just like When a collector buys a collectible piece of art, they receive a certificate of authenticity. In the same way here, NFTs act as the certificate of authenticity.
But NFTs are better than the certificates that can be replicated. NFTs, on the other hand, can’t be changed due to the security given by blockchain technology.
2. Contracts
NFTs use legal contracts. NFTs provide a more profitable way to enforce and accomplish contracts, be it for a home loan, a car lease, or a service contract.
Bacon protocol is one such example that is built on the Ethereum blockchain using smart contract technology. With this, anyone who has a Web3 wallet can receive interest by lending money. Also, they can know about the homes they are lending against.
This technology executes automatically and therefore eliminates the requirement of a middleman. It ensures more interest for lenders as well as more profits for the banks.
Complete digitization of contracts also helps in saving a large amount of paper.
3. Tickets
Compared to physical tickets, the use of NFTs as tickets for any event is a more sensible idea as the physical ones can be easily duplicated.
NFTs as tickets are legit, as well as collectibles and even art. 2022 VeeCon NFT tickets for a several-day conference are perfect examples. These were not just the tickets but were digital art pieces by Erick. The good thing about such tickets is that these can be bought or sold or kept as collectibles, even after the completion of the event.
4. Investments
If someone wants to invest in a part of a brand or company, then he can buy the NFTs, just like people buy stocks. NFT holders can keep on receiving additional value from the company, which is a new concept.
It means if the creator of the NFT wishes to give more value to the holders then he can do so and this makes NFTs better than stocks for investment purposes.
It is all upto the creator which value he wants to provide to the NFT holders, and this value can augment even beyond that particular NFT. This is something that is not possible in the case of stocks.
5. Raise Capital
Normally, for raising capital, companies need to approach potential or existing investors. They take additional money as either debt or equity. However, with NFTs, capital can be sought through the NFT community.
This is also not easy because companies first need to have potential investors in their brand, and once the community gets large enough, then NFTs can be sold out to raise the required capital.
This is different from normal capital raising because people with less income can also invest in the company and can help to raise the needed capital.
No doubt, for a consumer, the investment is risky, particularly in the case of a startup company. But it could turn out to be profitable if the company ends up doing well.
6. Trust And Transparency
NFTs offer complete trust and transparency for every transaction. It doesn’t matter if it is about a home loan or a collectible piece of art, blockchain secures every transaction in relation to NFTs.
You can easily see all the terms and conditions, the date and time of the creation of an NFT, and the amount of it traded. Therefore there is no chance of any forgery.
Everything that takes place on the blockchain remains available on the blockchain, and this provides a way to verify all the transactions. Every transaction of NFTs is transparent, trustworthy, and remains recorded forever on the blockchain.
7. Authenticity
Along with the other significant things, NFTs always provide complete information about their creator as well as the time of their creation.
In this way, they can be regarded as authentic and play a crucial role in the verification of authenticity.
With the arrival of NFTs, it has become possible to expose false claims by companies.
If a company falsely claims that its products are being sourced in a particular location, then this false claim can be easily exposed with the help of a transparent and authentic track record of NFTs.
Since each NFT is unique and authentic, it is unlike a conventional digital asset that can be copied. This is what makes them secure and valuable.
8. Scalability
Scalability is crucial for growing a brand. For this, brands make use of collaborations, local events, and various social media platforms. NFTs can help a brand or a business in scaling its reach by offering a unique platform.
Social media, newspapers, and other such platforms ask for money for advertising your brand as well as impose several restrictions on the type of content you can produce.
But with NFTs, everything is in the control of the creator. You can create anything as per your requirement, and no one can censor it. In addition, the reach in the case of NFTs is exceptionally high.
Conclusion
People are switching to NFTs because of the trading transparency and authenticity that it is offering. More and more people are switching to NFTs, and it seems that in the future, the craze for NFTs will only increase.
Therefore, in our opinion, it is surely worth investing in NFT art if you wish to gain profits in the future. However, before purchasing any NFT, make sure you check its authenticity.
