The NFT Craze: More than Digital Assets or Just a Phase?

Non-fungible tokens are technological advancements that are changing the digital world.  These tokens initially run on the Ethereum ETH/USD blockchain to store information.

However, the NFTs are not limited to the Ethereum blockchain as other blockchains can implement their own versions. These non-fungible tokens are unique; they include music, art or anything digital. 

The increase in activity in the recent past resulted from the use of tokens to sell digital art.

These developments left many users and willing investors with trouble when distinguishing whether the NFTs are worth the hype as more than digital assets or if it’s just a phase. 

Therefore, this guide will help interested parties understand more about these tokens and their functions going into the future. 

NFTs as Digital Assets NFTs as a Marketplace for Art

NFTs resulted in the creation of a new art market that is based on blockchain technology. This statement implies that using these digital tokens changed the art market around the world. 

NFTs are primarily digital forms of data such as music and art made by artists. Thus, artists and buyers are connected through the use of this new platform. 

The NFT marketplace allows artists to access buyers for their creations around the world in an instant and efficient process. 

Payment for these digital art forms is made in cryptocurrencies such as ETH. Therefore, using this market, digital art creators sell their unique works to interested buyers at viable prices that enable the artists to maintain copyrights while also raising funds in a process.  

The Use of NFTs is the Future of Art Collection

NFTS are unique with each NFT being the sole original. The ownership of these digital art forms remains with the creator and is recorded on the blockchain ledgers. Thus, while copies of the art can be made, the ownership of the original piece is easily recognizable. 

The recent surge in the NFT population stems from buying unique pieces and waiting for their value to appreciate. In this context, buying the NFTs becomes similar to purchasing physical art pieces. Once the NFT’s price increases, owners can sell them and make profits. 

This aspect makes NFTs a proper investment asset as they increase in value. Thus, owning an NFT from such a collection facilitates their applicability as assets. 

Digital ownership 

Digital transformation of the world led to the development of technologies such as blockchains and the metaverse. NFTs have become assets that can generate revenue for owners. Once individuals buy the NFT, they can allow for its use, which generates income based on the utility volume. 

Thus, individuals can earn revenue through permission and copyrights deals in this context. 

Similarly, the launch of the metaverse creates even more potential for NFTs. In the virtual world, the ownership of NFTs may become the equivalent to assets. An individual owning an NFT in the metaverse allows them to have the digital version of the item, which is similar to having property. 

Users can exchange these NFTs for currency or virtual assets in the metaverse. For instance,  in one network dubbed Birdez Gang NFTs, each Genesis birdez is able  to produce ten seed tokens per day for ten years. Seed is the equivalent of currency in the Birdez Gang’s metaverse. This seed can be used to purchase things or privileges such as clothes, weapons and naming rights for Birdez in the metaverse and to breed Baby Birdez, the second collection of Birdez Gang.

Online Communities 

NFTs are also encouraging the growth of a global online community. These communities mainly cater to individuals with ownership of a given set or type of NFTs. Holders in the communities are allowed some privileges. 

These privileges include early access to new NFTs, stakeholder privileges for future NFT and gaming projects, information access, and networking.    

The use of blockchain made transparency a key factor in the development of NFTs. Digital ledgers ensure that digital records are kept and therefore, it facilitates their stability and development as assets on top of the other factors mentioned above.

NFTs as a Liability

Despite the many functions and factors promoting the long-term viability of NFTs as assets, one key issue remains. Given that NFTs are a new technological form, regulation is non-existent. 

There remain no significant policies regulating the buying and selling of NFTs in the crypto markets. This lack of regulation may result in NFTs becoming volatile investments. Similarly, the onset of government regulation may impact the value of NFTs and cause losses.

Thus, while the government’s involvement may impact the popularity and value of NFTs, the stability created by the multiple functions remains apparent. 

These advantages significantly outweigh the risks that come with policy changes. Thus, NFTs are an asset worth investing in going into the future.