Moreover, you make money in the NFT marketplace while supporting the budding digital artists. So start making the profit now!
How much height do you think an NFT can achieve in value? Let’s provide you with some examples. “The first 500 days”, a digital art created by Mike Winkelmann, was sold for an eye-popping $69.3 million! Okay, that’s an art. It has aesthetic value. But what would you say to people in the NFT market buying the NFT of the first-ever tweet of Twitter founder Jack Dorsey for a whopping $2.9 million?
The value creation power of NFT is fantastic. To understand the safety of investing in NFT, specifically in NFT art, you need to be aware of the concept of NFT, its potential, profitability, pros and cons, and the ROI it provides. Let’s dive in!
What is NFT?
The full form of NFT is a non-fungible token. These tokens are the proof of ownership of digital assets. These assets are verified in the blockchain. A few examples of non-fungible tickets are collectibles, domain names, games, digital art, and real estate.
NFTs are also applied in blockchain businesses like DAO(Decentralised Autonomous Organisation). For example, a DAO can issue NFTs to its members, with each NFT representing a vote in the organization’s decision-making process to cast votes on proposals or decisions like partnership agreements, treasury management, operations etc that comes before the DAO. However, digital art is one of the most prominent sectors in the NFT market.”
Only wealthy people are and were able to invest in arts in the traditional market, but that’s not true for NFT. It is attracting the attention of aspiring common people by providing remarkable ROI in crypto assets.
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The current generation is technology-friendly and has information about the high-performing NFT assets in the market. So there’s no question of hesitating to invest in NFT or NFT art.
What is the Potential of NFT Investment?
If you are new to NFT, you may wonder why I would pay a hefty price for that image as NFT art if I can download any picture from the internet. Well, anybody can paint Mona Lisa or “The last supper.” You can buy posters and images of any famous painting in the world.
But does that painting, or image hold the value as close as the original art? No! Because that image or artwork is not authentic. When you invest in NFT, you invest in ownership and authenticity of any image or art.
The NFT-linked version of any art verifies that you own the original work and you have the rights to transfer its ownership to someone else. This value proposition needs to be honored if anyone wants to own the rights of that art. In this way, you get your return on investment from NFT.
How Do You Make Profit From NFTs?
The digital artists and content creators got a new opportunity to make money via NFT and blockchain technology. The purchaser also receives a worthwhile investment. Suppose you do the transaction in Ethereum (ETH). It is the second-largest crypto-currency, and 1 ETH is worth thousands of USD. It’s like buying shares. Your investment value also increases with the increase in the value of ETH.
The principle of demand and supply also plays a crucial role in the crypto market. With increasing awareness regarding NFTs in young professionals, the demand for digital art is rising. Obviously, the price of art pieces is also growing.
Also Read: Why you should invest in NFT’s from WazirX
There are numerous digital art projects first sold for a few hundred ETH. Now they are worth thousands. Some of the successful NFT art projects are The Currency and EthGirl.
What are the Crucial Pros & Cons of investing in NFT Art?
There are always two sides to the coin. It’s crucial to know both pros and cons of investing in NFTs before you start to invest. Here’s a ready list for you:-
Pros of NFTs:-
- The artists and content creators are getting recognition and money by launching their artwork through blockchain, so new avenues are opening for them every day.
- The concept of NFT in fractions, also known as fractional ownership of NFT, provides you with pricing positioning and investment diversification.
- Because of being digital, NFT is accessible globally. The transfer of the ownership is also swift.
- Blockchain assets are uniquely authorized. So they can’t be changed and replaced. Therefore the value is generated through the authenticity of the purchase.
- The unique and transparent ownership of NFT prevents fraud and plagiarism. You can own an NFT in fractions as well. That means multiple people along with you can hold the rights to a single NFT.
- Blockchain technology makes transactions extraordinarily safe and secure, sometimes more than real-world transactions.
Cons of NFTs:-
- Unlike traditional ownership, NFT ownership doesn’t provide you total control. It only means that the authentic image is with you, and you can take prints of that image.
- NFTs have a limitation as digital assets only. It’s not possible to digitize paintings and sculptures of the real world.
- A lot of carbon emission is generated for mining cryptocurrencies. However, experts argue that crypto will be instrumental in controlling pollution in the near future.
- NFTs are relatively new. So people need to understand their concepts before investing in them. It’ll take time for them to trade more in the potential selling and buying market.
Also Read: Crypto industry hit by anxiety of shakeout
Is it Productive to Invest in NFT Art?
Despite having its share of pros and cons, NFT art is a must-have investment in your portfolio. NFT market is a growing and highly volatile market. That makes it a perfect long-term investment. You may sell your digital artwork for a much higher price in the future.
But you shouldn’t forget that NFT is still the new kid on the block. Therefore you must research before investing in a particular NFT. Blockchain gives an excellent facility to track every transaction in the past regarding your asset. Look into the developers of the project and their success rate before putting your coins in.
NFT investment is not entirely free of risks. However, you can make a wise investment without any expert advice with a bit of research. Moreover, you make money in the NFT marketplace while supporting the budding digital artists. So start making the profit now!
