There is much speculation about how NFTs are valued. People see headlines in the media claiming that a JPEG was sold for millions or hundreds of thousands of dollars.
It’s easy to understand why others are so critical of NFTs and claim they don’t have any value. They only see the headlines from random images that sell for large sums of money.
What is it that gives NFTs their worth? This article will explain how NFTs are gain value and whether they will continue to be valuable.
How Do NFTs Gain Value?
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The Founder
NFTs are valued because the founder is ultimately responsible for creating demand and driving supply for the service or product offered by NFT technology. If a trusted brand is built around NFT technology, it’s possible for the NFT’s value to increase.
Similar to the brands of today, such as Nike, Amazon, Coca-Cola and Coca-Cola to name a few: The founders of these companies have built their brand’s reputation over decades and their products have appreciated in value.
This is true even when NFTs are involved. Why is it that Nikes are more expensive than generic brands of shoes? Are Nikes better than generic brand shoes? It’s not.
Nike’s brand name is the reason people will pay hundreds to thousands of dollars for a pair of Nikes.
NFTs are a true mess. While there are many NFTs with poor reputations and no real value to consumers they are still being bought by thousands of people.
This is known as a bubble..
NFTs are valued because the founder is ultimately responsible for creating demand and creating supply. If a trusted brand is built around NFT technology, it’s possible for the NFT’s value to increase.
Similar to the brands of today, such as Nike, Amazon, Coca-Cola and Coca-Cola to name a few: The founders of these companies have built their brand’s reputation over decades and their products have appreciated in value.
This is true even when NFTs are involved. Why is it that Nikes are more expensive than generic brands of shoes? Are Nikes better than generic brand shoes? It’s not.
Nike’s brand name is the reason people will pay hundreds to thousands of dollars for a pair of Nikes.
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Rarity
It can be that a digital asset’s supply is the key factor that determines its worth. It can be valued if it is scarce. There will be other factors that contribute to the value of NFTs, such as who is releasing them. NFT collectors will be attracted to a limited supply if it is a well-known company or public figure.
Bryson DeChambeau, professional golfer, has a limited edition NFT Collection that was OpenSea published in March. Only four cards were included in the collection, and three of them had 18 editions. There were 57 collectibles in total. This can be very rare if DeChambeau does not release future editions or his star career as a professional golf player continues.
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Utility
NFTs can also be used in other applications.
These NFTs can be more than collectibles and used to tokens in games.
An NFT can be used to give a player an advantage in virtual worlds. These NFTs can be used to enhance characters’ abilities or create new ones.
These NFTs are also available for trading on secondary markets.
The Future Of NFTs
We are living in a digital age, and technology has advanced at speeds that have never been seen before. NFTs are the next step. . However, they will have different uses and be of value in the future.
All NFTs are not valuable. The most valuable NFTs are generally those who have built a reputation for themselves, their products and their services.
NFTs don’t differ much from other applications, they’re just different. Let us know what you think. Is NFTs worth it or just another bubble that is about to burst? While time will only tell, history has shown that the evolution in technology is certain. It’s up to you to decide whether you want to follow the trend or not.
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