What Is The Value of an NFT: $2.9m or $6,800 or

Your NFT may be worthless or worth a ton of money, you will never really know until you sell it

$6,800 is what Sina Estavi got offered, less than a year after he paid $2.9m for an NFT of Jack Dorsey’s first tweet in March 2021. Estavi listed the NFT in the OpenSea NFT marketplace for $48m– according to The Guardian. March 2021, was good for NFT because another NFT Everydays: The First 5000 Days sold for $69 million at Christie’s Auction House.

So How Did this Happen?

Understanding that NFTs have no real-asset backing and that their value is dependent on demand driven by feelings and emotions is fundamental to understanding how this happened. For example, a football fan will pay £100 for a march and a non-fan will consider it a waste of money. And so I guess Estavi’s NFT had only a fan willing to pay $6,800.

An NFT of A Van Gogh painting is a limited digital representation of the painting, you have zero rights to the painting itself, and the value of your NFT is dependent on finding someone willing to pay more than you paid or not for it. NFTs could have utility values, mainly used in the game world to buy or represent skins or earned as your play.

What Is an NFT

According to Simplilearn - A Non-Fungible Token (NFT) is a digital asset that represents internet collectibles like music, games, and artwork with an authentic certificate created by blockchain. It cannot be forged or otherwise manipulated.

Simply put an NFT is an image (even lowly JPEG) created by anyone, puts on a blockchain like Ethereum, and then puts a price to it. Simple. According to Noah Davis of Christie’s, the biggest benefit of NFT is that it creates a mechanism for assigning value to digital art, and I agree.

Fungible and Non-Fungible

To explain Fungible and Non-Fungible, Zikomo, J. used an example - If I gave you a 20-Euro bill and got four 5-Euro bills, we would have the same value because they are fungible. However, if I gave you an NFT worth 20 Euros and got another NFT worth 20 Euros, we would not have the same value – you’d have my NFT, and I would have yours because they are non-fungible

The Value of NFT is Emotional and Risky

As we mentioned earlier the value of an NFT is largely driven by sentiments and this can change quite rapidly this explains the volatility in the NFT marketplace. Volatility is the biggest risk to your NFT investments.

Can I Make Money From NFT

Lots of money is being made from NFTs and yes you can get involved by making an NFT of your own or flipping NFTs, which essentially means buying at a low rate and selling at a higher price to make a profit. My position is, that as long as it is not illegal or harming humans directly or indirectly then if it's your thing get involved.

However You Will Need To

1.       DYOR –Do You Own Research; you need extensive education and research to understand what you are getting into

2.       And an abundance of caution – the space is rife with a relatively high level of crime, I am certain over time this will reduce but for now be careful there are essentially no regulations in the NFT space.

That said good luck.

CAVEAT:

·         Note- This is not financial investment advice.
·         All financial investments  involve risk DYOR (Do your own research) before making any financial investments
·         This article is my thoughts and opinion about the subject matter.