What Makes NFT Valuable?
As the popularity of cryptocurrency continues to skyrocket, companies worldwide are looking for new unique ways to incorporate this revolutionary technology into their core products and services. In this arena, online gaming, in particular, has become the focus of new ideas. Developers are looking for better ways to buy and sell in-game items, unlock identity, and much more with crypto. The collision of the virtual and real worlds, the Metaverse, has never looked that attractive and promising.
The rise of gaming tokens has become one of the most notable events of 2021 in the crypto industry. Analysts, gamers, and crypto enthusiasts are confident in the incredible prospects and future success of GameFi.
Understanding the Value of Non-Fungible Tokens
There are two types of tokens in the crypto environment: fungible and non-fungible. Fungible tokens are similar to money. Regardless of the serial number on the dollar bill, one can use any one-dollar bill to replace a one-dollar bill.
Non-fungible tokens (NFTs), on the other hand, are one-of-a-kind digital signatures and cannot be substituted by any other token. NFT’s appeal is due to the validation of its uniqueness and ownership, as well as its interoperability, which assures its usability across different applications. Such attributes are opening the doors to new business models and application cases.
In that sense, NFTs are valuable because they are scarce. The scarcity principle states that the less readily available something is, the more probable it is that we will want it and pay a greater price for it. That is, in the end, why NFTs are so valuable. People will spend a lot for an NFT if it locates something desirable, and there can only be one original of it. Look at the most expensive NFT.
What makes an NFT valuable? Why are NFTs Worth Anything?
NFTs are made of computer code, nothing more. Even if an NFT begins life as an analog painting, for example, or a music track recorded in a studio, the NFT itself is a digitized version of it.
NFTs are valuable because they verify the authenticity of a non-fungible asset. This makes these assets unique and one of a kind. For example, Picasso’s paintings are non-fungible. Therefore, while anyone can make copies of his paintings, the original painting remains irreplaceable and unique. Also, some NFTs has particular usage like aces to platforms or real pearks.
Why are some NFTs valuable, and others aren’t?
Although each NFT is unique and creates scarcity, the same concept stops working when millions of NFTs are minted daily. When there are too many options to choose from, there is not enough spotlight to make every NFT highly popular and valuable.
The NFT marketplaces are being flooded with new assets by the hour, causing a speculative purchasing frenzy. Thousands of people talk about what they’re planning to buy on forums and chat rooms, hoping to inflate the price and then sell when they think they’ve made enough money, a practice called “pump and dump“.
Because of that, assets that don’t go through a pump and dump movement, that are not produced by famous artists or celebrities, or that don’t undergo a strategic marketing campaign are less likely to achieve high monetary success.
What Makes an NFT Popular?
A healthy NFT community will follow a good project. The most engaged projects are often the ones that will succeed. NFTs go beyond owning art. They are part of a community where culture is created and that culture creates a following.
How to Tell if an NFT Will Be Valuable?
Overall value can be affected by the ownership history of NFTs over time. Hackernoon explained that Value is dependent on the identity and previous owners of NFT. Famous artists, celebrities, and brands often create those with high ownership history values.
How to Choose NFTs to Invest in?
The secret of most successful investors is research. Whether they will invest in traditional modalities or crypto, by researching the origins of the assets, they can increase their chances of taking part in a legitimate and profitable deal. The same concept must be applied to NFTs.
Here is what you should include in your research checklist:
1. The creator
The NFT creator plays a major part in its success as an investment. Especially if the prospect creator isn’t famous or well-known in the industry, it is vital to look them up and learn about their background. Some questions you can try to answer are:
- What are other NFTs they have created?
- What was the outcome of those projects?
- What do other buyers have to say about their work?
2. The product
A great way to check an NFT value before buying is by looking at its metadata. An asset’s metadata comprises information on the piece’s attributes, such as its name, image, or video. You can check the NFT’s metadata directly on its smart contract or extract it via the marketplace where it’s listed.
3. The project
If you wish to invest in an NFT-based project or startup, it is also wise to understand its goals and roadmap. The project’s branding keeps the project appealing and in demand, so as an investor, you must have a clear understanding of its possibilities. Some things to keep in mind:
- What are the founder’s plans for the project?
- Do they have any intentions to expand?
- What is the meaning of the brand?
- How are they planning on attracting attention?
4. The community
A strong initiative is always backed up by a solid and supportive community. The key to recognizing a good community that aims to support a creator and their work is by looking for regular courteous and meaningful talks on the project’s social media. Constant spam messages that might be being sent by bots can signal a red flag.
Look for communities that are mediated by a proactive community manager. Another great tip is to get involved in the community and spend some time with the members and, if possible, creators of the NFT you wish to buy.
5. Your budget
While this recommendation is not related to research, it is still worth remembering that your investments must always be within your reach and fit your budget.
It is never wise to risk what you can’t afford to lose, so use reason rather than emotion to enter the NFT market. Don’t get greedy and make sensible investments, looking for NFTs that won’t weigh too much on your funds.
Shop your next NFTs at the GamesPad marketplace
GamesPad is a multi-chain launchpad and marketplace focused on gaming, metaverse, and NFT related projects. In our ecosystem, an investor can find all the most promising opportunities of the crypto world in one place.
Our NFT marketplace, in particular, presents a set of unique and outstanding NFTs that have “future” as their core theme. Anyone can easily purchase our NFTs by simply connecting their wallet to our platform.
The NFT market is thriving, and it shows no signs of losing the fever so soon. It has been shown to be a great way to create and market unique digital assets of any type and format, from art and music to digital real estate. However, to succeed in this new venture, investors must know what makes an NFT valuable and how to identify the best NFTs in the market.
Would you like to start investing in the most impactful crypto gaming, NFT and metaverse projects with GamesPad? Learn how in this comprehensive tutorial!
Disclaimer. This material should not be construed as a basis for making investment decisions or as a recommendation to participate in investment transactions. Trading digital assets may involve significant risks and can result in the loss of invested capital. Therefore, you must ensure that you fully understand the risk involved, consider your level of experience, investment objectives, and seek independent financial advice if necessary.