4.7 C
New York
Friday, January 20, 2023

Title: How do NFTs create value?

- Advertisement -
- Advertisement -
- Advertisement -

Before we discuss the process of NFTs creating values, here is what you need to know about non-fungible tokens. The Non-fungible tokens represent something unique that the assets possess, may it be cryptocurrency or something else. 

It sometimes baffles the mind that a cluster of pixels is worth something. In this day and age, not only does the cluster have worth, but it’s worth millions in some cases. A piece of famous news regarding this was the sale of artwork known as Everyday: The first day of 5000 days. 

The artwork went for a whopping $69 million. Now an artwork can be sold for this amount of money. The shocking thing is that someone paid $69 million for NFT. For common users or people, the easiest way to understand this transaction is as follows: someone bought a picture off the internet. 

By making a system of verifiable digital possession, NFTs essentially modified the marketplace for digital assets, creating the chance for brand spanking new sorts of transactions.

The popularity of NFT has taken the world by storm, especially with the pop culture it has bloomed and multiplied. We are talking about Snoop Dogg and Stephen Curry owning their own NFTs. This proves one thing indeed, NFT or Non-Fungible Token is a reality that is taking the world by storm. The main question in the entire scenario is how does an NFT create value? How does it become from a random piece of art to an asset worth millions. 

Here are a few features of NFT that will help you clarify the idea of NFT and how it creates value.


This is perhaps the most important feature of NFTs. Every NFT is linked to a blockchain, making it unique. However, there can be several copies. Consider a painting like a Scream. There might be hundreds or thousands of copies, but there will always be a single original. So the same concept has a different application when it comes to NFT. 

Assets turned to NFT

This is a practice that has recently become very common. All the owner has to do is attach the NFT with a real asset in the real world and incidentally become an NFT. This is a very favourite practice for athletes, pop stars or actors to turn their favourite stuff into an NFT. 

Now for the real question: how does an NFT create value? 

NFTs value

For any commodity to create value, it must be unique, scarce and not available to everyone. No matter how cruel it might sound, this is the absolute truth. The most common example might be diamonds or other rare stones. They all maintain their value, especially the fact that they are scarce and rare. 

In the curious case of NFTs the concept of scarcity does not change, they are by nature scarce, and they can be transferred easily. Apart from the fact that these tokens are scarce, it is also notable that an NFT cannot be divided into two, or it is extremely difficult to do so. This makes them an asset in the world of cryptocurrency.

Now, this is something notable for sure NFTs could also be winning fulgurant, eyebrow-raising valuations. There’s a logic to how—and when—they produce price. As mentioned below, we are looking at a few of the reasons for how the value is created. 

Short in supply 

The feeling of owning something that is rare or limited in nature is a positive feeling. That is why having a limited supply of your NFT is something that one should always ensure. The fact that having a limited supply ensures fewer copies of the original is also an incentive to take full advantage of.  

One for the collection

Remember the fuss about Crypto Kitties? Those were NFTs that you actually had to breed with other crypto kitties in order to create a larger collection. Some of the NFTs are pure collectables, such as the pokemon cards. Ask Logan Paul. The collectable NFTs actually add value to the assets. There is also an element of the trade when it comes to collectables. So keep your collectables close to your heart and your traders even closer. 

Certified value

Most of the NFTs are revealed or developed by game studios. We are looking at rare, collectable game assets being released. Now imagine if an asset released in the metaverse is deemed as rare, hard to get or most wanted. The value of that particular asset is bound to increase a lot. This creates value for the NFT. 

Read also More blog on sqmclub and thetechboy.


One of the biggest assets that are tied down with the NFT is the utility added to it. We are not talking about cryptocurrency and its value being dependent upon the currency. The dips and rises, NFTs are a bit different when it comes to this type of value building. They are flexible enough to not only be a part of another product and rigid enough to replace an existing product on its own. 

NFT is considered to be a revelation since the internet, imagining owning a million dollars in GIFs really does change the perspective of everything related to investment and savings. There is no doubt that a large number of the corporate sector has decided to dive into the NFT. It is pretty much a case of full cycle. At the advent of the internet, the concept of contemporary communication means was unknown or was considered unachievable. Similarly, the possibilities and opportunities attached to Non-fungible Tokens or popularly known as NFTs, are still either unclear or considered unachievable goals. 

Do check Cloud City Metaverse to get more Insights.

- Advertisement -

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -

Latest Articles

Get In Touch With Us
Contact Us For Guest Post Services
Contact Us For Guest Post Services