The blockchain makes it possible for NFTs to be digitally signed and publicly verified as valid without the need for a trusted third party to verify their authenticity. The opportunity to quickly make a profit by trading NFTs has, nevertheless, been a major driving force behind the popularity of these instruments. Nonetheless, NFTs have other uses, such as digital treasures and significant digital keepsakes.
When compared to NFTs, which often convey more than simply a picture, JPEGs may be copied indefinitely. As a result, they are perfect for simulating works of digital art, collectables, or in-game objects due to their scarcity. While NFT rights management is still in its infancy, it has the potential to pave the way for a new era in which digital assets are really owned by their creators and not just copied and shared.
Why Do Consumers Invest in NFTs?
- To Gain Access to Premium
The main perk of NFTs is that their owners have special privileges. This paves the way for users to acquire digital assets that are unavailable to the general public, which can then be used to provide them special privileges such as early access to new NFT collections through Catalog and membership in invitation-only online communities.
- Success Condition
Due to their distinct qualities, NFTs are often considered a promising investment option. The fact that NFTs cannot be split means that a single NFT may be worth more than the sum of the cryptocurrencies used to purchase it. Since their worth is mostly determined by the market and how much people are willing to pay, they make a good investment for individuals seeking a return on their money.
- As a Means of Keeping Things Valuable
Given their stability in price, NFTs may be thought of as a kind of digital savings. Certain NFTs provide a solid investment opportunity since they are not affected by inflation in the same way that conventional currencies are. However, this isn’t always the case, and some industry insiders predict that as much as 90% of the value of existing NFT services in a platform like Catalog will be eroded over the next several years.
- Protecting Intellectual Property in the Digital Age
NFTs provide an encrypted means of establishing digital ownership. Since the status of each NFT is recorded and confirmed on the distributed ledger, forgery and theft are rendered very unlikely. In the case of tangible assets like real estate, this makes them well suited to protecting digital rights.
Last quarter of 2021, NFT trading volume was $10.7 billion, a new all-time high. Consumers of NFTs are expanding beyond the original circle of early adopters and traders.
There is a common misconception that individuals who purchase NFTs are ignorant, although this assumption is dependent on the buyer’s motivation. Some individuals put their money into them because they see them as a secure way to build wealth in the future. Others put money into NFTs because they are hard to fabricate or steal and therefore a reliable way to prove digital ownership of real goods and collectables as well as access to unique advantages.