Is an NFT Investment Profitable?

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Most traders, who are well-informed about cryptocurrencies, have heard about the NFT hype. Yet, some don´t know what exactly NFTs are or if it makes sense to invest in them. This article tells you everything you need to know in order to make up your mind. If you´d like to find out more about NFTs and NFT marketplaces, visit https://nftexp.io.

What is an NFT?

If you´re thinking about investing in NFTs, you need to know what they are, how they function and whether they´re profitable or not. The acronym NFT is short for non-fungible token. The tokens are unique, attached to their owner and not interchangeable. But what are they for and how do you invest in them?

The Concept of NFTs

NFTs are tokens that are stored and transferred on the blockchain. Ethereum was the first one to promote the tokens, but other blockchain follow suite to allow NFT investments to take place via their decentralized database. The NF token is attached to its owner, but not only that: By investing in an NFT, the token itself only represents the value of something else – usually of a digital creation. The token is then attached to the digital item, as well, and is therefore proof of ownership.

What Do You Get When Buying an NFT?

NFTs are digital files. The whole scene is called NFT art, and describes what could become a new art epoch – the first digital one. On the market, you´ll find a myriad of different genres for digital artwork. The most popular ones are:

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·         Artwork: collages, hashmasks, GIFs, other esthetic creations – the most valuable one, a collage by an artist named Beepl, went over the virtual sales counter for almost 70 Million US-Dollars

·         Collectibles: digital NBA baseball cards, soccer cards or the popular CryptoKitties, which started off the NFT revolution back in 2017

·         Files: certificates and licenses

·         Video games: the CryptoKitties are part of an interactive game for example

How Much Is Your NFT Worth?

It is hard to tell exactly how much a piece of NFT art is worth. Prices for art are usually created by various factors: offer, demand and lover value. If the seller and the buyer both agree on a suitable price, NFTs can technically keep their value forever.

Even though the tokens are transferred via blockchain technology, they are different from cryptocurrencies: The value of an NFT is not regulated by market fluctuation, which makes them a great store of value. But how do you actually pay for your artwork? As soon as you have picked a digital creation, you can invest in it using your token. The non-fungibles themselves do have a value, but that is just the purchase price. The real value is determined by the amount of Ether coins you pay for the file.

Why Are NFTs Hyped?

Pixels, digital cats, baseball cards – all that doesn´t sound like it´s got anything to do with the financial market. Are NFTs just a hype, much ado about nothing? It´s been four years now since NFTs started revolutionizing the art industry. As soon as marketplaces and even auction houses like Christie´s started accepting Ether as a means of payment, the NFT concept has really arrived in the scene.

In 2017, NFTs actually created the large part of all transaction made on the Ethereum blockchain. That means they haven´t just turned the art scene upside-down, but the financial market as well.

What Is So Fascinating About NFTs?

Art has always been a great store of value. That is why all the grand pieces of it have remained in the hands of a very small, but sophisticated group of people. The art market is a very old one and is known to be rather cumbersome and slow.

Cryptocurrencies and blockchain technology on the other hand – they are the exact opposite of that. They are fast, volatile, digital, extremely modern and not actually tangible. It´s the combination of these extremes that fascinates investors.

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CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com

Felix Küster

Felix Kuester works as an analyst and content manager for Captainaltcoin and specializes in chart analysis and blockchain technology. He is also actively involved in the crypto community - both online as a central contact in the Facebook and Telegram channel of Captainaltcoin and offline as an interviewer he always maintains an ongoing interaction with startups, developers and visionaries. The physicist has couple of years of professional experience as project manager and technological consultant. Felix has for many years been enthusiastic not only about the technological dimension of crypto currencies, but also about the socio-economic vision behind them.

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