Author: Traders Expert Date: January 19, 2022

Lets Talk NFTs

Lets talk NFTs, Is This the next BIG thing? Are we witnessing the new “Bitcoin”?

NFTs are currently taking the digital art and collectibles world by storm. Digital artists are seeing their lives change thanks to huge sales to a new crypto-audience. And celebrities are joining in as they spot a new opportunity to connect with fans. But digital art is only one way to use NFTs. Really they can be used to represent ownership of any unique asset, like a deed for an item in the digital or physical realm.

If Andy Warhol had been born in the late 90s, he probably would have minted Campbell’s Soup as an NFT. It’s only a matter of time before Kanye puts a run of Yeezys on Ethereum. And one day owning your car might be proved with an NFT.

What’s an NFT?

NFTs are tokens that we can use to represent ownership of unique items. They let us tokenise things like art, collectibles, even real estate. They can only have one official owner at a time and they’re secured by the Ethereum blockchain – no one can modify the record of ownership or copy/paste a new NFT into existence.

NFT stands for non-fungible token. Non-fungible is an economic term that you could use to describe things like your furniture, a song file, or your computer. These things are not interchangeable for other items because they have unique properties.

Fungible items, on the other hand, can be exchanged because their value defines them rather than their unique properties. For example, ETH or dollars are fungible because 1 ETH / $1 USD is exchangeable for another 1 ETH / $1 USD.

NFT examples

The NFT world is relatively new. In theory, the scope for NFTs is anything that is unique that needs provable ownership. Here are some examples of NFTs that exist today, to help you get the idea:

  • A unique digital artwork
  • A unique sneaker in a limited-run fashion line
  • An in-game item
  • An essay
  • A digital collectible
  • A domain name
  • A ticket that gives you access to an event or a coupon

Can you make money with NFT?

The answer is yes. Blockchain technology and non-fungible tokens (NFTs) offer digital artists and content creators a unique opportunity to monetize their digital creations and digital products.

What makes NFT art so spectacular is that an artist or content creator who creates his artwork on the blockchain does not need an art gallery, store or museum. He also does not need an agent or even a large number of followers on social media to make money.

The other differential is that the artist can receive compensation, usually between 5 to 10% royalties when his work is resold on the secondary market, as well as his copyrights are protected.

And finally, since Ethereum is the second-largest cryptocurrency, it has a market value of over $420 billion. Selling a digital artwork today for 1 ETH (which, at the time this article was written, is about $3,500 USD), can be more valuable over time if 1 ETH appreciates to $10,000 USD. (Just like it is to buy shares for example). NFT art can also be considered a short and long-term investment.

 

Bulls on the Bloc NFT

Is NFT a good investment?

While collecting NFTs still requires mostly cryptocurrency, there are many examples where a relatively small investment has the potential for big returns.

Trevor Jones, for example, is a traditional artist who moved into crypto art in 2019. His first NFT piece was EthGirl, a digital painting depicting an animated collage of the Ethereum logo that reveals a face. The NFT art was initially sold for 70 Ether (ETH), equivalent to $10,000 at the time. Two years later, in 2021, with the NFT hype, the artwork was valued at over $8 million.

The value of an NFT or crypto art is determined by the same principles as all other assets. The old law of supply and demand.

As the online community of collectors or buyers and investors grows over time, demand increases. At the same time, as more artists see NFT art as a better option for their creations, the supply increases.

As is the world of traditional art, rare pieces by popular artists are the ones most likely to be appreciated, collected or purchased. There is more demand for 1/1 works than 1 of 100. Auction and secondary sale prices for these art pieces can increase significantly along with collector demand.

The famous British artist Damien Hirst, announced in mid-July the launch of his NFT collection, called ” The Currency “. 10,000 coins were offered to the public, and they were purposely shaped in a way that resembled legal tender.

The originality and generality of this project are that these coins force their holders to make a choice. They can decide to keep the work in physical form or as an NFT stored on the Ethereum ledger. Thus, whenever one form is chosen, the other is destroyed.

The project has been successful: more than 32,000 people have requested 67,000 of these NFT works, almost seven times the number available. At $2,000 each, the sale should reach $20 million.

On the other hand, NFTs are very interesting options for art collectors, because you are buying and investing at the same time in a new revolution and also in the art itself.

Some believe that NFTs will completely change the art world as much as Bitcoin (BTC) and Ethereum (ETH) will change the financial system.

Like all investments, however, as an investor, you need to research the NFT market well. Not all NFT platforms and markets are as safe and reliable as others like OpenSea, Foundation, Nifty Gateway and SuperRare, for example.

For potential investors, there are well-known and well-managed NFT-only art-based trading platforms such as SuperRare, Nifty Gateway, Rarible and Foundation. The NFT market is also very transparent. You can view trade data or past transaction history for individual pieces, artists and, even more usefully, collectors

Traders Expert