Unlocking the Potential: The Purpose and Value of Owning an NFT

The NFT market has attracted some of the top industrialists, celebrities, and sportsmen worldwide. Investing in Tokenized assets has certain advantages as each NFT project comes with some unique ideas and roadmaps that can offer long-term benefits.

What Is The Point Of Buying NFTs？

Before thinking about what the point of buying NFTs is, you need to know what NFTs are.

NFTs or Non-Fungible Tokens are digital assets with unique identification codes secured by Blockchain Technology.

For example, if you buy digital art, the digital version of the “Monalisa” painting or the digital version of a “Mozart Symphony”, you will have digital rights over it. Yes, other people can see the painting or can even make copies of or enjoy the music, but the original version will belong to you and no one else.

How Do NFT Non-Fungible Tokens Work？

If you can understand how Non-Fungible Tokens work, it will be easier for you to acknowledge what the point of buying NFTs is.

NFTs can be minted directly from the websites or can be bought from the NFT Marketplaces after the public minting is done at the official website.

However, when the sale happens, you do not get the original version of the NFT, but you get the certificate of ownership. Everything happens under the security of Blockchain Technology. When you purchase an NFT, it will be stored in your digital wallet.

The Blockchain is like a database, keeping all the data of the transactions and the ownerships. But, unlike regular databases like Excel sheets, the Blockchain creates a chain of blocks and records all the activities within a shared digital ledger.

Being a part of a decentralized economy, Blockchain technology allows you to track each transaction and entry within the same network or blocks.

For example, several NFT marketplaces offer royalties to the creators every time their NFT is sold. So, through Blockchain technology, you will always be able to track when your digital artwork changes hands.

While being a digital asset, they cannot be confused with cryptocurrencies.

A particular cryptocurrency has a particular price at a particular moment. For example, as of 19th April 2022, the price of 1 Bitcoin is USD 40739.90. There are more than 18.9 Million Bitcoins and no matter where you are or how many you are willing to buy, the price will be the same.

But, when we talk about the NFTs, they cannot be traded with one another as they will never have the same price. Unlike cryptocurrencies, the price of an NFT depends on several factors (the most important factor is Rarity). Even within the same project, the NFTs will have different values – and thus cannot be exchanged with one another.

Where Can You Use NFTs？

What is the point of buying NFTs？ – The ideal answer to that would be how you can use the NFTs, right？

We are merely witnessing the evolution of NFTs, and for now, you can use them on the following spectrums:

Use NFTs As Collectables:

If you like collecting unique items and adding them to your inventory, nothing can be more than investing in NFTs. There are thousands of NFT projects that offer unique artwork. Each NFT project has a community of investors and collectors.

So, by buying NFTs, you can collaborate with other collectors from all over the world – build your collection – and sell it later if necessary for a better price.

Use NFTs For Gaming:

If you are into gaming, the Non-Fungible Tokens have revolutionized the idea of play-to-earn games. Several gaming NFT projects allow you to play their games in the Metaverse, join the in-game economy, and earn passive income from it.

Other Uses Of NFTs:

NFTs offer proof of ownership and thwart any chances of fraudulent activities when buying luxury items. So far, this has greatly helped the Fashion industry to mark their items, but in the future, other industries can reap the benefits of NFTs too.

Is an NFT a good investment – Yes, because its usability is not restricted to a specific circle – and in the future, we can see more mainstream uses of NFTs.

What Makes NFTs So Valuable？

NFTs have become so valuable assets that not just the big-time investors, but common people are also looking to invest their money in them.

If you are still thinking about what the point of buying NFTs, it is authenticity and rarity.

These days, it‘s not hard to find duplicate products on the market. But as NFT is becoming more mainstream, the idea of authenticity is gradually increasing. With NFTs, you don’t have to worry about dealing with counterfeit items as they are secured by Blockchain technology and managed by Smart Contracts.

Now comes the Rarity factors of the NFTs. We always strive to find something that is unique, something one-of-a-kind. As each NFT is made with different attributes, the uniqueness will always be there – so the chances of gaining better ROI will never fade.

Are NFTs Dumb, a Scam, or Secre⁠t⁠ly Useful？

Non-fungible tokens for art can seem a lot like Tulipmania. However, distinct digital tokens have real use cases for things like online address management.

NFTs: so hot right now. You might have heard so much about these eye-popping auctions for weirdo jpegs on the internet that youre pretty sick of them by now. For those still on the bubbly side of the hype cycle, “non-fungible tokens” can seem like the solution to online art monetization. For everyone else, NFTs seem mostly like a high-tech way to part a fool from their money.

And lots of money is changing hands. One market tracker reports some $500 billion in all-time NFT sale volume shuttled through top markets like Cryptopunks, Hashmasks, and Makersplace. But this is a superstar market. Most NFTs go for nothing at all, while a few supernovas go superviral (and strike it super rich).

Beeple, the closest thing we have to an enfant terrible of the NFT art scene, set the record when he sold a collection of digital grotesques for (of course) $69 million through a Christie‘s managed auction. This wouldn’t be the art world if a record-setting event wasnt marred by allegations of self-promotion and possible scamming: The proud purchaser of EVERYDAYS: THE FIRST 5000 DAYS, was revealed to be the Beeple- and crypto-investor MetaKovan, who had a financial interest in pumping up the price of Beeple works and NFTs more generally.

But with numbers like these, it is no wonder so many have rushed to cash in literally and metaphorically on this hot new trend. And these days, money is cheap.

Taco Bell sold some NFTs. So did Grimes, some $6 million worth. Professional attention seeker Logan Paul took a break from his Pokéhustle to issue a few million worth of NFTs. The worlds of sports, sneakers, and music have all dabbled in some NFT magic to try to build some buzz and a buck. Weeks after the craze kicked off, even New York Times technology columnists are trying to pawn off their scribblings as some kind of new blockchain bling.

How does an NFT work, anyway？ What did MetaKovan purchase for that $69 million in real-world money？ Nothing is stopping me or anyone else from right-clicking on that rather unremarkable blur of five thousand images, saving it, and sharing it with the world. How can you say to “own” an inherently non-rivalrous property？

What MetaKovan and the new class of proud NFT owners “own” is the “T” part of the acronym. They own a cryptographic token. The token is unique—hence “non-fungible”—and associated with a specific and verifiable piece of data. The token cant be divided, duplicated, or destroyed (although the owner could easily lose it). People are buying a digital key file that is associated with the artwork or piece of music or property title in some digital space that is supposed to tell the world: “I own this.”

It does seem stupid. But then again, a lot of things that other people spend their money on seem pretty stupid. If there can be no disputes in matters of taste, there can certainly be boneheaded delivery methods to satisfy them.

One of the biggest problems with NFTs so far is that they have been fairly logistically unworkable. Theyve been around for a long time, arguably since 2013 or so, but have failed in each iteration in part due to the following inherent problems. How can you tell if the person who sold you an NFT for some work has the “right” to do so？ Perhaps that Beeple that you “bought” is just some copy, and the “real” NFT holder has yet to sell. Who verifies which is “real”？

Maybe you say: Well, look at whichever NFT was purchased first. But suppose an NFT pirate simply got there first (there are whole marketplaces that allow people to “sell NFTs” for anyone else‘s content). The “real” Beeple was still working through the process with Christie’s. What you bought was some sketchball copy. Looking further ahead, what is to stop Beeple or any other artist from re-issuing the same work at a later date, thereby possibly devaluing your investment？ It all starts to look very silly.

These conceptual concerns pale in comparison to existing and common failures in execution, however. In a lot of cases, the NFT you just shelled out good money for might end up merely “proving” that you own a broken link. NFTs need to point to something. Usually, this is in the form of a URL that leads to a JSON metadata file. If whoever is hosting the URL goes out of business or just decides not to host that file anymore, well, tough luck. That association with a broken link is what you “own.” Its already happening, and it will probably accelerate as the NFT buzz dies down and more of these marketplaces start to wind down.

NFT skeptics will almost certainly get to enjoy their schadenfreude. But this does not mean that the concept of an NFT is utterly useless. In many ways, the ongoing NFT mania is just the latest iteration of a cyclical cryptocurrency craze. First, there were altcoins in 2013-2014. Then, there were initial coin offerings in 2017. Now, NFTs are having their day in the sun.

Yes, there was a lot of stupidity and a lot of scamming going on during each of those manias. But there was real innovation that got kind of ignored amidst the gold rush, too. Developments in altcoins lead to real improvements in privacy technologies in the form of privacy coins. The initial coin offering boom resulted in “decentralized finance,” or DeFi, which is still being worked through and is now seeing integration with the Bitcoin network. NFTs, while maybe nonsensical for art, can have real value in resolving longstanding issues in online identity and address space.

Heres one example of a non-stupid NFT: Urbit addresses. Urbit is one of the several contenders in the race to build a more decentralized computing infrastructure. To access Urbit, you need something called an Urbit ID. Urbit IDs are NFTs. They are unique, indivisible, persistent, and freely traded on NFT marketplaces like OpenSea.

But unlike NFTs for art, Urbit IDs empower holders with a real function: accessing and participating in the Urbit network. Its a key to activity and environment, not just an ephemeral trophy establishing that you spent money on some GIF associated with some IPFS link at a point in time.

NFT IDs can provide a more decentralized way to manage address spaces. As the telecommunications theorist Milton Muellers Ruling the Root describes, there are entire global multistakeholder organizations that have been created to manage online identity and address space disputes for things like top-level domains (e.g. ICANN). Any central authority introduces the potential for control and therefore conflict; consider the brouhaha over the U.S. relinquishing authority over the management of the Domain Name System (DNS).

With Urbit addresses, there is no “ICANN” tasked with adjudicating such resolutions over identity and addresses. Addresses were spawned, randomly granted to early users, and now traded on secondary marketplaces. When you purchase the Urbit ID, you get the cryptographic key that establishes and protects your identity with the Urbit system. Its self-authenticating. Other examples of NFTs that manage address space include the Ethereum Name Service (ENS) and Handshake, which provide ICANN-like functions through a blockchain, and Decentraland, which manages property titles in a digital world as NFT assets.

In other words, the usefulness of an NFT will depend on exactly what that “T” allows the holder to access. Does the token unlock some useful online function or property, like with an Urbit ID？ Or does it just point to a rando JSON file owned by some NFT marketplace？ If its the latter, you might want to save your money for some old-fashioned real art that you can at least hang in your living room.

One good sign that a craze is winding down is that it gets the Saturday Night Live treatment. If last week‘s Janet Yellen rap video is any indication, NFTs may very well be on the cultural way out. But even if you never hear the term “NFT” again in the next few months, it’s a good bet that non-fungible token architecture will stick around as a way to manage address space online, this time with fewer lolcats.

FAQs

Where To Buy NFTs？

You can buy NFTs directly from the website by participating in the minting process. If not, you can also buy NFTs from secondary Marketplaces.

The Top 5 NFT Marketplaces

1.OpenSea is the largest and most popular NFT marketplace, boasting a vast collection of digital assets, including art, music, domain names, virtual worlds, and more. Founded in 2017, OpenSea offers an easy-to-use platform for artists and collectors to mint, buy, and sell NFTs. It supports a variety of blockchain networks, including Ethereum, Polygon, and Klaytn, having it accessible to a wide range of users. With its robust search and filter options, OpenSea allows users to discover unique digital assets effortlessly.

2.Rarible is a decentralized NFT marketplace that allows creators to mint, sell, and trade NFTs directly. Known for its community-driven approach, Rarible gives its users a voice in the platform's development through its governance token, RARI. This token allows holders to participate in decision-having processes, such as platform upgrades and fee structures. Rarible supports multiple blockchain networks, including Ethereum and Flow, and is popular for its user-friendly interface and strong community engagement.

3.SuperRare is a premier marketplace for digital art, focusing on high-quality, single-edition pieces from renowned and emerging artists. Each artwork on SuperRare is tokenized as a unique NFT on the Ethereum blockchain, ensuring authenticity and ownership. The platform carefully curates its collection, emphasizing artistic value and originality. SuperRare also incorporates social features, allowing users to follow their favorite artists and interact with the community, creating a vibrant ecosystem for digital art enthusiasts.

4.Foundation is an exclusive NFT marketplace that aims to bridge the gap between traditional art and digital art. It operates on an invite-only basis for creators, ensuring a high standard of quality and creativity. Foundation has become a go-to platform for artists looking to auction their work to a global audience. The platform's elegant design and focus on storytelling allow artists to present their work compellingly and engagingly. The foundation's community-driven approach and emphasis on collaboration make it a unique player in the NFT space.

5.Enjin Market is a specialized NFT marketplace built on the Enjin blockchain, which is known for its focus on gaming and virtual goods. Enjin Market allows gamers, developers, and collectors to buy, sell, and trade NFTs related to in-game assets, collectibles, and digital experiences. The platform leverages Enjin's robust ecosystem, which includes a suite of blockchain tools and integrations for game developers. Enjin Market is renowned for its seamless user experience, security features, and innovative use of blockchain technology to enhance the gaming and digital collectibles industry.

Are NFTs A Safe Investment？

As the idea of NFT is still in its infancy, the market is quite volatile. But if you stay updated with current NFT trends and do your research before buying NFTs, nothing can be a better investment plan than this.

Is NFT A Good Investment？

The best part of NFT investment is that it is accessible to everyone. No matter if someone is a big-time investor and has been investing in NFTs for a long time or someone who is looking to begin their career in NFTs with a small amount, there is a prospect for everyone in the NFT marketplace.

So, is NFT a good investment？ Is there any point in buying NFTs？ – Yes it is

NFTs have surely defied the complications of our traditional finance system, so they can generate better ROI for you if you weigh the underlying value of your digital asset before investing.