What Makes an NFT Valuable?

We live in truly remarkable times. Some of the most obvious elements of our life are now being reconstructed and redesigned right before our eyes!

We thought that money was all in the hands of governments – and then people created a decentralized currency that does not depend on the federal reserve or national bank’s decisions.

We thought we could create art only if it was being drawn, a sculpture, or something like that. It turns out – art can be anything you can imagine! You can create your art online with millions of people watching it, and if it’s something people like – they’ll tell you.

You don’t need a curator or an art school to tell you if your works are good or bad. The world of art has been democratized, and now it’s up to the people to say what they like and don’t like.

And here, the NFTs come into the picture. They’re new, they’re fresh, and everyone’s talking about them. Well, if it’s on everyone’s mind, we’ve decided to check out and do a quick little research on why exactly artworks are so valuable these days.

So, if you want to get a better grip on what NFTs are all about, be sure to check out our article!

What is an NFT?

As many popular questions are floating around these days, let’s find out what exactly is this NFT phenomenon everyone’s talking about. In essence, NFT is a non-fungible token, one of a kind, and can never be replicated.

So, it’s a rare and valuable asset as it is the only one in the world. Of course, it’s not like you cannot make copies of it, like with every JPEG or something, but NFTs cannot be replicated in the sense that you just can’t create another, let’s say, “signature” that is on the original.

Think of it this way, you can create a copy of the Mona Lisa by Leonardo da Vinci, but it won’t be the original version. It’s the same with digital art.

NFT space allows everyone to participate in a global market full of possibilities. Creating a non-fungible asset and trading NFTs in a great community is rare. Those digital assets are much more secure than most art pieces. You can do a Mission Impossible style heist and exchange the painting in the Louver museum.

Even more – some experts estimate that many of the works in private and public collections are just counterfeited art, and the real ones are hidden, or their location is unknown.

Why is NFTs Valuable?

So, there are many reasons why NFTs are valuable. Some of those are connected to how rare they are, their popularity, the democracy of choosing which ones are good and bad, and just overall NFT utility power in this world. We’ll find out the most important reasons why such a thing as an NFT could be valuable.

Uniqueness

One of the most critical aspects of an NFT is how they are created. To make an NFT, you’ll need to go through a process called “minting” NFTs. What does it mean? Well, the most simple of explanations is this – it’s a process during which a video, music, or really – just any file can become part of a blockchain with a unique “code” attached.

Minting NFTs

Minting NFTs is what makes it special, and also – you can trade it between different parties on such markets as Nifty Gateway, for example. You can use cryptocurrency from your digital wallets to perform such a digital transformation, or you can mint “just in time” when someone decides they want to buy your NFT.

Digital Art

Whatever the idea, you can get your NFT minted pretty quickly and have your own crypto art. The fundamental difference between this and traditional art is that it exists only in the digital space.

The other is that a digital certificate can track the uniqueness and rarity of your NFT.

You may think it’s something easy to counterfeit, but you’d be mistaken. Once you have your NFT on the blockchain, you cannot mint the same thing on a different account.

Counterfeit Art

Of course, some people can download the art and mint it themselves, but it’s not famous for a few reasons. First – everything that happens on the blockchain stays on the blockchain. What it means is that if you put your NFT up there, you will somehow put it in the public domain.

All the users will be able to see the history of this NFT, which users bought before, when it was created, etc. So, even if someone puts up counterfeit NFT on the market, it’s pretty easy to see which ones are real and which are not.

Also – you can check the artists themselves. Most of them publish their art before selling it as an NFT, so it’s pretty easy to tell a fake artist apart from the real one.

Hype

Most NFTs are not as valuable as some of the prices you will see online. Of course, it’s not like they’re worthless, but there is a lot of hype around them, and, as usual, it’s good for the business.

Digital content has existed for decades, step by step pushing physical assets out of the equation. When it came to art, things became a little more tricky. But, with the introduction of NFT, it became much easier to become an artist and an art connoisseur.

You can say whatever you want by any specific NFT, but as all things go, the more people are interested in something, the more hype is generated around it, and the more you can sell it for.

Back in the day, physical art was appreciated by a percentage of society. Primarily – the more snobbish ones. Nowadays, everyone’s interested in art, so digital artists have a wider audience than some art galleries in Vienna when it was still all physical. So – it’s a game of numbers. Any given NFT can become the next big thing, and the users will decide.

Investment

The other great thing about NFTs is their future value.

Not actual value, but future value. The times are rough, and galloping inflation can plummet your savings monthly. Well, NFTs’ worth, like many art pieces, will not plummet the same way as the other investments.

You will always be able to sell it to some dignified gentlemen on the other side of the world who is interested in your digital file.

You can simply buy NFTs easily as an investment of your capital. Times may change, and you always need to keep that in mind, but there will always be some buyer for a specific piece of art that can be interested in your artwork.

The art market never seemed to stop increasing, and during scare times – it’s good to keep money somewhere, at least in some ways, safe.

Shady Investments

Well, a digital asset is not always the same. As people on many NFT marketplaces can see, NFT art, as traditional art, can be used as a power for evil too. Because, as in real life, you can just as quickly sell it to an average person or someone who just wants to inflate the price of it to clean some money.

Or just to deposit it for a non-disclosed period. Art, in general, has been used for decades by shady characters, and in the case of NFTs – it’s no different.

It’s much easier to artificially inflate the price of some artworks by buying them for an absurd amount of money to clean them than by starting a business etc. It is what it is; hate it or love it, it’s the game.

Scarcity

The basic scarcity equation in economics is this – people will always want stuff, and they will want more and more of it. The property is out there on the streets to be taken. But – there is a limited amount of things on the market. So, there will be a shortage of some products for some people. Or, in other words, scarcity.

The same goes for the digital NFT market. In the past, it was effortless. You could copy any single object you’d want and then copy it up to infinity. There were no restrictions whatsoever on your path to do so.

So, here come NFT projects. We needed to think of how to make a digital collectible worth something. The answer came pretty quickly. Just make one of those the original.

Non-fungible tokens are just that. A way of making copyable digital collectibles something unique. Something that one of the users can say – this is mine, and it’s the original. Everything else is a copy of my original. And for some reason – it’s essential for humans.

You can look at many examples, such as Bored Ape Yacht Club. You can copy it, put it as your phone wallpaper and do anything you want with it (except commercializing it, which would be a crime), but you can’t have the original. Snoop Dogg and Eminem can create art based on those apes, but they can’t say they own the original concept. 

Utility

As we’ve stated before, there is a difference between valuable NFTs and those that are, well, not as much. It’s not like every NFT-based object on the internet will be treated with the same respect as some of the Christie’s Auction House.

With so many NFTs floating around, it was understandable that some would get more popular and some less.

If your NFT is, in some ways, a utility to the world, people are talking about it, you can see copies of it in digital galleries. You can then clearly see why such piece would be more valuable than others. 

Everyone would want to have the next big thing, and for a reason too. Those popular pieces can go up in price and earn a nice buck by getting those digital goods early. Intellectual property is also a really interesting topic, but it would probably dive a little too far into laws, so let’s drop it here.

In the end, as we’ve stated before, the real value of the NFT market comes from how democratized it is. The people have spoken; we like weird apes wearing different uniforms. And that’s what we call art.

NFTs are Forever

Well, at least as far as we know. The current state of affairs tends to show us that NFT sales can indeed be a forever investment.

As we’ve stated many times before, getting an NFT on the blockchain can inflate its value. It can also make it a much more stable investment than a physical object. Depending on how you perceive it, this artwork, original artwork, can be accessed from wherever by whoever has the key.

You can say that it’s a computer code and it does not really matter but as blockchains, at least for now, feel like they’re unbreakable, you can see why those investments can seem so safe. And because we really do not see the end of blockchain technology anytime soon, we can safely assume that this makes NFTs valuable.

Are NFTs a Good Investment?

Yes and no. Or, as we should probably say – it depends. It’s still something big, although it seems to be heading towards the peak of it, where it will probably stay for a while. And if you invest in something big, it will probably give back to you. Not everything all at once, but something, somewhen for sure.

It depends on what kind of money you have at your disposal. If you’re not a multi-millionaire then we would probably not recommend getting a mortgage for an NFT home, but it’s not like we would tell you not to do anything at all.

It’s a pretty good market to invest in, especially if you would take some time, and learn a little bit about art and expressions. Learn how this world works, what are the rules of this market and how you can earn some coin from it. We would recommend getting some upcoming artists’ NFTs. Those would be much cheaper and can become really popular in the future. It’s a risk, but it’s like this with every investment. You just need to be aware of it.

NFTs Future

There are many things that can happen with the NFT market in the near future. First thing is – it can collapse on itself. It’s doubtful as there are many powerful people with hundreds of millions, even billions of dollars invested in it, but it’s certainly a possibility.

On the other hand – it can grow exponentially. We can see it already. Digital Gucci shoes, new and underrated digital homes that you can buy for real money. Virtual reality is getting closer and closer to us. NFTs are marching on top of it. If those pieces would ever lead us to a brighter future, then it would certainly be great to own the only original digital pair of Air Jordans.

Whether we like it or not, this kind of world is right next to us. We can pretend it’s not happening or just embrace it and make some money. The choice is pretty simple in the end, we’ll just have to make it.

What Makes an NFT Valuable – Conclusion

We hope that now you have an insight into this fascinating world of NFTs. They took the digital world by storm and they are not stepping back!

So, check your crypto wallet and see if you can guess what will be the next big thing. Who knows, maybe it will be you who will find what the Zeitgeist is nowadays. In the end, even those digital assets are bowing down to the old song and dance of supply and demand.

NFTs work great in many things, as we could see. It can be an investment, it can be a utility, and it can also be an element of international speculation. 

Whatever it is in the end, it’s recommended to check it out while it’s still hot. Things come and go, but one thing stays the same. And that thing is – the only thing that matters, happens right at this moment. So be sure not to miss it!