- NFTs are digital assets that represent real-world objects such as artwork, music, video, and game items, and can be traded online.
- The most common digital assets are related to digital artwork, but there are also games, music, photography and sports accessories that can be used to register physical objects under the NFT protocol.
- Like works of art, the appreciation of NFTs depends on the equation between scarcity and demand that emerges around these types of products. Therefore, the rarer the work, the more valuable it is.
you may have noticed NFT It’s a hot topic in the investment community and beyond. 2021,”NFT” was named Word of the Year by the British Collins Dictionary. But after all, How are NFTs valued?
To dig deeper into this topic, electronic investor Talk to Rafael Dittrich, founder of digital business accelerator Betminds, during VTEX DAY, a digital transformation event in São Paulo (SP).
What is NFT?
Non-Fungible Tokens (NFTs) are digital assets Represent real-world items—such as art, music, video, and game items—and trade them online. “Unlike cryptocurrencies like Bitcoin and many other utility tokens, NFTs are not interchangeable with each other,” Dittrich said.
Dittrich explained that a fungible item, such as money, Can be exchanged for another substitutable itemFor example: “As long as they have the same monetary value, real banknotes can be exchanged”, he said. Irreplaceable items are artworks, rare items and other unique specimens.
each NFTs are registered on the blockchain, a cryptocurrency ledger. This mechanism guarantees the uniqueness and ownership of the asset, allowing it to be negotiated. “Non-fungible tokens represent an irreplaceable identity and individual,” the executive clarified.
How to invest in NFTs?
for Invest in NFTsneed buy digital assetsAccording to experts, the most common digital assets today are related to digital artwork, but there are also accessories for games, music, photography and sports.
NFTs can be traded directly between related parties.However, the most common is Buy and sell NFTs on professional platformssuch as OpenSea and Rarible Coinbase NFTs.
Once acquired, the non-fungible token can be used in any transaction, even as collateral for decentralized loans.
How to know if NFT will appreciate in value?
Dittrich explained, NFT appreciationlike a work of art, Depends on the equation between scarcity and demand emerge around these types of products. Therefore, the rarer the work, the more valuable it is.
NFTs generate value if the work is appreciated by the public. “To do this, it is necessary to understand the project and what it will bring to those who own it. The possibilities are manifold, but scarcity will largely dictate future appreciation”, commented the expert .
The price of a digital work may also be related to the artist who created it, as happens in the traditional art market.Opinions of critics or digital asset markets are another possible cause of Evaluation of NFTs.
Dittrich cites the Bored Ape Yacht Club’s collection of NFTs as an example. The collection’s iconic monkeys have won over celebrities and boosted industry status. Bored Ape Yacht Club has become the most expensive NFT collectible in history, with the cheapest NFT worth BRL 1.7 million. Transactions involving NFTs easily exceed millions of dollars.
Also read:Boring Ape: NFT that can be the owner of Neymar’s ‘partner’