NFTs (non-fungible tokens) are the newest thing in the crypto world. They are a new type of cryptographic token that allows for unique assets to be represented in digital form.

They’re also one of the most complicated things to understand. Why? They are not like any other token that has come before them.

Are NFTs worth it?  Can you make money with NFTs? How can you own an NFT? We’ll answer these questions and more in this article.

Is an NFT Worth Anything?

The answer is relative because the value and functionality of an NFT depend on the art or collectible itself. If an NFT is unique and rare, chances are it would command a higher asking price on the listed NFT marketplace.

Factors That Determine an NFT’s Value

Because the asset class is new, defining the exact value of an NFT is quite tricky. While physical artworks such as the Mona Lisa have defined values, investors contemplating buying NFTs may find it difficult to decide the worth of a Non-fungible token.

However, as NFTs gather momentum in a wide range of digital industries, we have identified six key factors that determine their worth.

These factors include::

1. Rarity

Some rare items are worth more than others. This is the case for collectibles like the Beanie Baby. Its scarcity is because only so many of them are made, and it changes hands much less frequently than other items.

2. Applicability

The real-world use of an NFT determines its utility, whether in the real or virtual world. Some NFTs, for example, can be deployed in games as characters, spells, or virtual territories, making them more than just collections. Because of this, NFTs have a value that grows over time, based on the project’s reputation.

A good example is the Euro 2020 NFT Tickets, collectible cards like Geralt of Rivia in The Witcher Universe Gwent Card Game.

Also, forming collaborations with other firms to provide value to customers who hold your NFT is another easy method to use and improve real utility. For example, Dapper Labs can work with NFT event planners to get a discount for CryptoKitties owners.

3. The Demand

If there is a high demand for an item, it will be worth more. This can create the illusion of one NFT being more valuable than another. It’s pretty much the universal law of demand and supply.

Also, getting a one-of-a-kind artwork by a well-known digital artist won’t be easy, especially because you’re not the only one placing a bid.

People are attracted to such NFTs because of their raw quality and uniqueness. This establishes a sense of distinctiveness and defines the NFT’s value. At this rate, such NFTs are valued higher than most

4. The Condition of the NFTs

If an item is in excellent condition, it will bring in more money; not so much if it is damaged or in poor condition.

5. The Effort Put into Obtaining the NFTs

Some items take more work to get than others. The time, effort and skill that goes into obtaining an item are directly related to its worth. For example, if you put work into making something yourself (like a painting), it will be worth more than if you bought it (like a print).

6. The History Behind the NFT (has it been owned by someone famous?)

This is not a factor that affects the worth of an item, but it does affect how much people are willing to pay for it. If you owned something previously owned by someone famous, it is probably worth more than if you just bought the item from a regular person.

Can You Make Money With NFTs?

On some sites like Rplanet, you can stake your NFTs to gain bonuses and rewards. Also, investing in businesses is another way to make money with non-fungible tokens. 

You can also make money from your NFTs by selling them on an NFT marketplace for a higher price than when you initially bought them. If you have a bunch of NFTs and they don’t sell, try lowering their cost to increase your chances of selling them.

How Can I Buy NFTs?

Some websites, like eBay, have a ‘Buy Now’ option, where people can buy NFTs for a set price. If you’ve used eBay before, you’ll be familiar with the process of purchasing NFTs. 

The majority of NFT marketplaces operate in the same way as an auction house. You make a bid and wait to see if you are the winner of the NFT of your choice.

One more thing to keep in mind concerning NFT markets is that prices are frequently listed in Ether decimals (although the Dollar value often accompanies them).

Due to the volatile nature of the crypto exchange price at any given time, a Dollar value can vary often. The prices are listed that way because almost every NFT market requires that you buy NFTs with Ether, the currency of the Ethereum blockchain, which most NFTs are based on.

Before buying an NFT, you need to have Ethereum stored in a cryptocurrency wallet. Also, note that a random ‘gas fee’ is applied to each transaction. However, some marketplaces accept payment with debit cards.

Where Can I Buy NFTs?

Many NFT marketplaces serve various users’ needs. Some sell a wide range of tokens, from collectibles to music and art and web domain names. In contrast, others specialize in selling specific trademarked collectibles, like the Axie Infinity, NBA Top Shot.

Other NFT marketplaces include

• OpenSea
• Rarible
• Foundation
• Mintable
• SuperRare

You should also know that each of these marketplaces has a specific crypto wallet that they require before you transact on their platform. Most of them accept MetaMask, or Coinbase Wallet, Portis, Formatic, and Torus.

Bottom Line

Although worth is mostly a matter of personal perception, it does follow a set of market norms. When it comes to NFTs, the rules are based on the factors mentioned above.