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Why are some NFTs so expensive?

NFT stands for non-fungible tokens. These days we can see lots of NFTs’ collections on NFT markets. Making an NFT is as much as easy as uploading a selfie! But there are some questions such as:  why some of them have been sold for millions of dollars? And what is the difference between them? In this article, we have explained more about NFT and its producing process and then we talk about NFT value and prices. Continue to get more about NFT value.

 

What does NFT mean?

NFTs are digital tokens that are stored on the blockchain. Despite cryptocurrencies where two coins are equal, for example, there is no difference between two Bitcoins, each NFT is unique and people can use it as an ownership document to prove their asset’s ownership. NFT is like a digital signature that you can sign your work with it. To sum up we can say NFTs are scare which makes them important for people.

 

What is NFT usage?

Many artists in different fields are selling their works as NFTs. Despite illustrations, musicians have sold their tracks or albums as NFTs. The main usage of NFT is providing ownership of anything. Especially an artwork.

 

How does NFT work?

NFTs are based on blockchain. Blockchain consists of blocks and nodes. And any computer which is on a blockchain network is called a node.

What does blockchain mean in the NFT world?

Each time NFT creators want to sell their NFTs on the blockchain, all nodes verify the transactions and also they verify the creators’ signature besides proving the new NFTs’ owners.

And since the blockchain is public, you can see which wallet the digital asset used to belong to. And the owner before it. You can track any digital assets, who extracted them, and when.

 

How do artists use NFTs?

Bianca Beer is a digital artist who often works with companies such as Nike, Microsoft, and Adobe on major branding campaigns. She started using making NFTs this year and she really likes it. Bianca thinks that NFTs have made it possible to contact customers outside of the gallery space.

“It’s like a royalty,” she says. “Which is the dope thing for creators because you can generate some passive income from something you’ve previously made.”

An artist who has made work by using Photoshop or aftereffect, sell their works in NFT markets such as OpenSea, Raible, and Foundation.

 

How to make and sell an NFT?

You can create your NFT in any way you want from a simple mobile phone picture to a professional painting. You need to have a wallet which is like a program. And then connect your wallet to your favorite NFT market, put a price, and sell it. Consider that selling an NFT is a transaction on a blockchain which means that you must pay the fee. Sometimes the fees are very high and it makes selling NFTs hard.

 

Why some NFTs are valuable and others are not?

In general, things are valuable when they are scarce. There is only one Mona Lisa. There are only 59 top NBA shots by Duning LeBron James (one of which sold for $ 387,000).

But the truth is that people are generating millions and millions of NFTs that are flooding the markets, leading to a speculative buying frenzy. There are forums and chat rooms with thousands of people talking about what they want to buy to raise prices and then sell when they think they have made enough money.

NFT markets are not mature. They are speculative and driven by movement and emotion rather than price discovery.

It’s like a rush of gold, where people pay thousands of dollars for pans and shovels and then millions of dollars for every stone that comes out of the ground, whether it is gold or not.

In some cases, these markets are likely to calm down and, like the primary and secondary art markets now, prices will begin to reflect real demand.

It is worth noting, however, that NFTs are the gateway to digital assets in digital environments such as Metaverse or video games.

But now, knowing that irreplaceable tokens are creating a new way for people to create things on the web that are not reproducible helps.

Source: afr.com

 

 

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