Why are NFTs worth millions of dollars?
Look at the image to the right for a moment. What, if anything, could convince you that an image is worth $3.4 million?
What you’re looking at is an NFT, one of the first-ever created. It’s part of the Bored Ape Yacht collection, a set of 10,000 NFTs released in 2021.
NFTs are “one-of-a-kind” digital assets that can be bought and sold like any other piece of property but have no physical form.
While traditional art has always been valuable, NFTs are becoming a more popular way to purchase and sell digital art. Why would someone pay nearly as much for virtual ownership of digital art as they would for a traditional piece of art? The answer is straightforward: ownership.
The scarcity of NFTs, as well as high demand from collectors and investors, has fueled a lot of interest in tokens. The founder of Twitter, for example, sold one for just under $3 million.
The main reasons why NFTs are the future are:
Whether you agree with NFT or not, some of the upcoming trends in this space have the potential to alter how we use the internet.
Digital art collectibles: Any artist can broadcast their work or sell it directly to interested purchasers via NFTs. This allows them to earn the best possible price for their artwork. Artists can also earn from royalties paid in NFTs via smart contracts.
NFTs and the metaverse: The metaverse hype is ubiquitous, even though it hasn’t fully taken off. When metaverses do gain traction, NFTs will be at the heart of their immersive technology. And the enormous potential and utility of NFTs, as well as blockchain technology and cryptos, will be realized within them.
Play-to-earn games: The gaming industry is already thriving, and internet gaming has given non-traditional financial institutions (NFTs) new life. With the combination of the two, gamers in crypto-powered play-to-earn games will be able to buy and possess in-game assets in the form of NFTs. Such assets can then be profitably sold on NFT marketplaces.
Fundraising: NFTs have demonstrated that fundraising may be simple and decentralized. With the security of blockchain technology, people can utilize smart contracts to establish NFTs that contribute money. The benefits are that they are transparent, publicly traceable, and ensure that contributions are directed to selected charitable organizations.
According to art economists around the world, the NFT market is progressively gaining traction among significant buyers and dealers.
Since Quantum, the first NFT, was minted in 2014, NFTs have come a long way. In just 8 years, artist Beeple’s NFT titled “EVERYDAYS: THE FIRST 5000 DAYS” was sold for $69.3 million in 2021, making it the most expensive NFT ever sold. The NFT industry is linked with some of the largest and fastest-growing digital industries, such as gaming, metaverse, and Web3.