The business world is abuzz with NFTs, the latest crypto
currency these days. These latest investments are turning collectibles and
digital pieces of art into easily tradable items on the blockchain. Apparently,
artists and organizations like Kings of Leon and NBA have earned millions of
dollars through it.

But what exactly are NFTs? And most importantly, how one can
earn big profits out of them?

Well, there isn’t any hard and fast logic behind it.
Basically, the entire NFT model relies on latest blockchain technologies, the
phenomenon of deeding and titling assets that has been practiced for centuries.
And the earlier you get into this, the more chances you can get in earning big
profits that are likely to go up in value.

You will find many articles about NFT stocks to invest in,
or some suggestions from NFT stocks reddit for best NFT stocks, who most likely
encourage you to go in big, but we will recommend you to start with a small
amount so you don’t lose it all.

Source: Wired

If you’re planning to invest, here are six insightful things
you should know before stepping into NFT trading:

What
are NFTs?

NFTs, also known as non-fungible tokens, are a kind of
cryptocurrency established on smart contract platform like Cardano or Ethereum.
These are like those rare gems that are too cool to own but also profitable to
trade. Think of them as virtual collectible cards.

Note that NFT isn’t like a regular product itself.
Basically, similar to like a car or house deed title, the NFT denotes ownership
in a thing. It represents that you are the owner of something, and nobody has
the right to claim it. For example, internet domains can be owned by using
NFTs.

You can
lay claim on anything virtual through NFTs

And that’s what makes it even better. Because, unlike
property deeds and titles, NFTs can represent ownership on anything tangible or
intangible – be it a gif, a show reel, picture, basically anything! If there’s
any art or even meme you deem unique, you can create an NFT for it and make
money trading it.

But there are some exceptions. Items like Bitcoin or dollars
can’t become NFTs because they fall in the items that are easily substituted.
There should be a unique or differentiating factor to stake your claim on, just
like art pieces. Keep in mind, you can never create NFTs of things you don’t
own. For example, you might want to create an NFT of planet Mars or Mercury,
but no sane person would dare to purchase it. Because no individual can
legitimately lay their claim on them.

However, there are some rare instances. For example, A
Flowing Hair Silver Dollar of 1974 was sold for $10 million in 2013 because of
its uniqueness and historical significance, which makes it worth a lot more
than its actual value.

Are
they suitable for investments?

Humans are weird, to be honest! Like, literally, we’ve
created a whopping multi-billion-dollar industry based on only artwork and
collectibles. Can you believe that?

Millions of people are employed to create
such items. From high-end auction houses such as Christie’s and Sotheby’s to
online retainers like Etsy and ebay, all of these platforms are fundamental
sources of making money out of your collections.

Individuals even insured these items against damage and
fraud. To put in simply, these are big deals and you can make a whole lot of
money out of them!

NFTs are based on a model originating from the same principle.
While virtual art pieces can easily be distributed or copied in minutes,
individuals are still willing to own the original product. All that it takes is
a love and passion for collecting something, just like Brunei’s Sultan, who is
an owner of about 7,000 cars!

Apart from passion and love for collectibles, there are
people who just want to appreciate the artist for creating an art that they
truly enjoy. The internet is full of people who are selling their art in less
than a 100 dollars. If you like a specific artist, we strongly recommend you to
purchase their pieces of work, because they need your financial support to keep
their work going.

And if you’re an artist yourself, you can relate to it more.

And if you’re none of the above, and are only here to make
profit, there are three reasons why we think NFTs are bound to rise and shine.

Reason#
1 They are fun and simple!

Source: Forbes

The entire process of collecting virtual arts, like in-game
assets (words, guns, coins), kitties, cards, images, gifs and even memes, is a fun
and easy concept to understand, and the best thing is that it doesn’t require
any prior financial knowledge.

For example, if you’re able to cross a certain level of game
that is impossible for others to reach, you can even create an NFT of it and
other gamers would very much be interested to purchase it.

There is a lot of psychology involved into this. Owning a visually
aesthetic object, a unique item, or an object with an immutable record of
ownership is always psychologically appealing to individuals.  

So, with that mindset, we believe that NFT stocks are going
to boom in the coming years.

Reason#
2 Investment appeal and security

Source: Tomsguide

Trading of scarce items is a zero-sum game; individuals
always go for items that are unique and deemed high value by them, thus their
demand increases and so do its price.

According to scientist Albert-Lazlo Barabasi, network drives
success when performance can’t be measured. Especially in the art department,
renowned artists create limited number of art pieces, which are highly sought
after by many art enthusiasts. This encourages price boost.

The NFT market is different from any other conventional
market. If you take any sector without scarcity, for example, when face masks
got more expensive due to global demand, more face masks flooded the market
because their mass scale production was simple and easy, and could be done by
anyone who had the means. This also meant there could be an indefinite number
of independent players in the market.

But the same thing doesn’t apply to the NFT stock, because here
the value of an item depends on psychological attraction, not physical need. If
a thing is adored by someone, it will be adored till death. So, the economic
flow is very much different from the conventional market.

Reson#3
it’s an adoption from Asian countries

It’s no surprise that a number of crypto projects often
target the Asian market. But with NFTs, this is particularly interesting,
because the concept of collecting unique items, objects, and art pieces is
deemed as something fancy and extraordinary in countries such as South Korea
and Japan.

Asian culture is highly influenced by cute characters,
images, and peculiar representations of certain objects. For example, mascots
represent a particular company or town, and many popular emoji’s originate from
Japan.

In short, their undying love for collectibles might be
instrumental in rising NFTs stock prices.

To conclude, it seems like NFTs have a great future ahead,
but be careful how much you invest in it!

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