After cryptocurrency’s ascendance, you may be on the lookout for the next big thing. Many are saying there are solid opportunities for making money in Non-fungible Tokens, better known as NFTs. Unlike betting at online crypto casino online, NFTs might come across as a little confusing for non-tech types. However, they don’t have to be, and we will help explain how they work in this article. We’ll also look at several different types, so by the end; you’ll have a good idea of whether NFTs present a sound investment opportunity or if they are indeed a new kind of lottery.
What is an NFT?
Like cryptocurrency, NFTs are digital tokens on a blockchain that represent an individual, unique item. This could be an asset from a game, a rare tradable item, or artwork – anything really, there are no set limits to what an NFT can be. In a nutshell, an NFT is a digital item that can be proven to be completely unique.
The benefits of NFT’s include having a permanent record of who owns the item in question. This has allowed players to trade rare in-game items, allow artists to sell digital work, and has created a new market for investors or speculators to potentially make money.
Various NFT Types
What started in 2017 with digital pets in the popular decentralised application CryptoKitties has mushroomed into a number of different areas. The popularity of NFTs has increased, and so has investment.
In traditional video games, the maker has control over the items in the games they create. This includes ownership, manufacture, characteristics, and distribution. However, with NFTs, players can potentially create, buy, own, and trade assets, which can then be tracked and tokenised on the blockchain. It even opens up the possibility of transferring items from one game world to another, so they can never be lost, even if a software publisher closes down. Markets have popped up where players can buy gaming NFTs from each other rather than take the time to create, earn, or find them.
Collectable memorabilia is huge in the ‘real world’, and they are proving popular in the digital realm as well. Thanks to collectable NFTs, it is possible to buy digital assets and potentially sell them at a later date for a profit – like investing in baseball cards or celebrity signatures. One of the first examples of NFT collectables was CryptoPunks. These are a collection of 10,000 8-bit looking individual characters that were given away free as part of NFT history.
Investing in art is nothing new. People have been buying paintings both for their aesthetic value and in the hopes that their price will rise. However, trading artwork is not easy. There is a need to use third parties to broker deals that can be pricey, not to mention there is an issue with forgeries. NFTs largely do away with all of that. Digital artwork can now be easily bought or sold while being easy to prove originality. One of the most famous digital artists is Beeple, who spent 13 years collecting 5,000 images into a piece called ‘Everyday: The First 5000 Days, which sold for $69 million.
A Lottery or Not?
As you can see, NFTs provide the chance for some people to make huge sums of money. However, not everyone will become millionaires from dealing with them. Everyone is different, and people have different risk/rewards tolerances. As such, NFTs can be viewed as a lottery in some circumstances or as an investment like any other, depending on individual approach.