People often ask: are NFTs good business? They want to understand whether there is good money in the NFT industry. The NFT market has grown steadily in the last years, and more and more people are starting to view NFTs not only as legitimate business, but as an opportunity to make good investment.
NFTs are a good business for a wide variety of reasons. Let’s check them out together.
The most immediate aspect of NFTs is their scarcity and uniqueness. An NFT cannot be forged and they are sold in limited quantities— meaning, each NFT is special and has a high chance to hold on to its value.
Because each NFT is unique, the rarity effect creates in the buyer the understanding that each ownership is permanent and specific. While many won’t understand the value of the token, it’s because the non-fungible token has its own intrinsic rarity and is tied to a singular NFT project that motivates people to buy.
The scarcity of each NFT also means that their specialty and uniqueness becomes a matter of collectability. Buyers are fascinated by the possibility to own multiple tokens from each NFTs drop.
Think of NFTs as collectable assets that can be swapped like baseball or football cards. Some people collect vintage stamps, other collect old coins. NFTs bring the experience of collectability to a whole new digital level. Much like the art market, where buyers are willing to pay hundreds of thousands of dollars for a single piece of work, in the world of tomorrow, digital assets will be tokenized, with people more and more willing to pay for ownership of each asset.
NFTs are a fast-growing business and they have shown multiple application. For example, NFTs are quickly becoming a powerful force driving the digital real estate sector.
Virtual lands NFTs allow buyers to own the digital portion on a metaverse platform. As such, NFTs act as proofs of ownership of that particular digital land. That also enables owners to decide what to do with it— renting it out or building an online advertising business on it.
As you can see, the possibilities are endless as NFTs allow for ultimate creativity to flourish, be prized, and take control.
The tokenization of digital assets can also provide owners with instant liquidity. Because of their proof of ownership exemplified by the NFT, owners can lend or rent out their digital assets for a fee.
This does not mean they lose their right to own it— just as in real life, the owner of an asset or service can profit from others enjoying and making use of the asset while still retaining their ownership.
NFTs represent not only good business, but even a cultural shift that allows artists to take full control of their work. Because of tokenization, an artist can ensure control over their work and prove sole ownership.
This also prevents duplication and dissemination of copies— in a way, NFTs give power and ownership back to original creators. NFTs are, in a way, a revolt against the established middleman class that acts as a gatekeeping force, preventing artists to sell directly to interested buyers.
At the same time, NFTs are tied to a proof of ownership. That means that when the creator exchanges the non-fungible token for a sum, the buyer acquires full ownership. In turn, when reselling happens, the new buyer is declared sole owner of the the asset. The rarity of the asset increases the value.
Because NFTs get traded and sold in decentralized marketplaces, investors look favourably to them as there is no middleman in the process. Artists and project team members profit directly from the sale, the same way buyers do not pay commissions. The original creators of the NFT also profit directly via commission every time that NFT changes hands.
NFT security is guaranteed by blockchain technology which protects the data and exchange at every step. Therefore, the investment is encrypted and secured in the shared ledger and all parties can testify to the validity of the transaction. This makes NFTs particularly transparent compared to similar marketplaces like art trading.
In short, NFTs are good business because of the nature intrinsic to their technology (blockchain) and because of the rarity that characterizes each asset. People make huge profits buying and reselling NFTs because the value that is attached to them is agreed and disseminated between the parties. It’s a transparent and, above all, a fair system.
NFTs open the doors to a world where creation and interest can have a direct relationship, without a care for the envious meddlers who are cut off from the transaction. Who creates and who is interested in the created work can make the most out of NFTs— and the most is yet to come.
Thank you for reading and see you soon,
The Mintersbay Team