You’ve heard of that exciting acronym: NFTs. Maybe you’ve seen it in the form of memes and GIFs boasting expensive price tags, or as a profile picture or ticket granting exclusive access to a virtual or in-person event.
If you are thinking of investing in NFTs, you need to know the basics. Keep reading for everything you need to know about NFTs explained.
What Are NFTs?
Non-fungible tokens, commonly referred to as NFTs, are digital tokens that represent ownership of unique assets or items. NFTs can range from GIFs, digital images, to tickets and virtual clothing.
NFTs have taken the world by storm in recent years, and now represent a robust multi-billion dollar market. But is the hype worth it, or will the excitement about NFTs fizzle out as quickly as it has glowed up?
NFTs aren’t just pictures online or screenshots from internet culture. NFTs have expanded into a multi-billion dollar industry that connects artists with buyers, and contains expansive projects with multi-year plans. NFTs aren’t just digital pictures in galleries, they are legitimate tokens that represent unique assets.
Cryptocurrency and Digital Wallets
Another thing to consider when deciding to purchase an NFT are the costs associated with acquiring digital assets. You will need a place to store your NFT, and oftentimes those storage spaces are in the form of a digital wallet which costs money.
Many digital wallets can exist in a cloud-based format, wherein your cryptocurrency and NFTs live in a virtual wallet that you can access via the internet. However, the more secure option is more likely to be an offline option, or a cold storage hardware solution.
This can be an external harddrive, or an offline hardware wallet that can hold your crypto and NFTs without the risk of someone accessing them through the internet.
Figuring out Your NFT Price Point
The price points for NFTs can vary greatly, and often coincide with the project’s rarity, marketplace, and associated perks and benefits.
For example, the CryptoPunks minted in 2017 were given away for free, but are now reselling for millions of dollars. While the majority of NFTs selling are in a lower price range between $500-$1500, there are a number of NFTs that are consistently selling for millions of dollars.
Whatever NFT you choose to purchase is going to be based on your price range, investment commitments, and interest in the NFT project.
How much you’re willing to invest is up to you, but be sure to conduct research about the type and scale of the project you’re interested in and some comparable NFT projects and how those projected values line up.
Selecting an NFT That Works for You
Asking whether an NFT is worth the money is a complex question. When you choose to invest in stocks, or join a gym, is there a guarantee of a return? No. There’s never a guarantee when you’re dealing with a market, and in the case of the gym… well, your return comes when you work for it.
Though going to the gym and purchasing an NFT aren’t the same thing, there’s always a level of risk involved and a level of reward. NFTs comprise a multi-billion dollar industry, and there’s good reason for that.
NFTs open up access to a number of exciting digital and real-world opportunities, and it all depends on the kind of NFT – and it’s associated perks– that you want to pursue.
What’s Worth it For You?
Do you seek a more connected digital community? Are you an art collector? Do you get joy out of internet culture, memes, and GIFs? Perhaps you’re a serious gamer and want to honor that commitment. Whatever your motivation for purchasing an NFT, there’s an NFT for every interest and the potential with NFT continues to be virtually limitless.
NFTs are also a really compelling argument for committing to a more accessible internet space. Built on blockchain technology, NFTs are examples of what a decentralized, more transparent marketplace can look like online with offline counterparts.
The Bottom Line
As with any investment, it’s suggested that you conduct thorough research before investing. What are your investment priorities? How might you go about thinking through what kind of NFT is best suited for your personal and financial goals?
Build your virtual wallet, join marketplaces that have piqued your interest, and browse for an NFT that calls to you. Invest time, before you invest your money, into researching what the project is about.
Read the NFT roadmap, their business plan, their commitments to you as investor, and what your return – aside from the financial growth – might look like. Will you get access to exclusive sales?
Entrance into virtual or in-person concerts and events? Figuring out what kind of NFT you want can be the most difficult part. Once you’re invested, make sure it’s stored securely so that you can protect your investment as it grows.
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