Why Should You
Buy NFTs?
Terminology
Here are some definitions to help you better understand the explanation
The metaverse is a vision for a new place to interact with other humans and bots to play games, conduct business, socialize and shop. That’s the metaverse of the future. Right now, the metaverse is a grab bag of hardware, software, and unrelated experiences. You likely have seen one piece of the metaverse in a standalone form, as a game or maybe a training session. There is no connective tissue to bring all these components together — yet.
Liquidity is effectively a measurement of the ability to buy or sell a particular asset at its current fair market value. For example, if you own an NFT and want to trade it for U.S. dollars, there needs to be enough demand on the other side of the order for you to be able to make the sale at the current exchange rate.
A blockchain is a decentralized, distributed, and oftentimes public, digital ledger consisting of records called blocks that is used to record transactions. Blockchain stores information in batches called blocks. These blocks are linked together in a sequential way to form a continuous line. A chain of blocks. A blockchain. Each block is like a page of a ledger or a record book.
Records, assets or any other kind of data is not stored in one place. Instead, it’s spread across many people & computers, all over the world. Totally distributed, it removes the need of a central authority (ex. banks) to check the validity of the transaction.
In short, a decentralized ledger is not stored in one location, managed by one authority, but is spread across various locations and managed by many people.
Explained
Read the explanation and then try our quiz below to test your knowledge.
Investments
NFTs have proven to be a profitable form of investment owing to some of the following reasons:
Creates Value for the Tokenized Asset
NFTs create a medium whereby physical objects like art works can be tokenized, thus eliminating the duplication of such art work and limiting ownership to the artist. This in turn creates scarcity for the art work and hence, value for it.
It provides Investors more Liquidity
Tokenizing assets gives investors more liquidity over their assets when they need it. An example is when a virtual land owner decides to rent out his/her virtual space (in a specific metaverse) to advertisers or influencers for a fee, while still retaining ownership over the land. The virtual land in this case still belongs to the owner, but part of it is liquified as rent.
Potential for growth and development
NFTs possess potential for growth and development of the land sector. Pegging NFTs to land pieces has proven great potential for growth and development, for instance in real estate, owning and controlling virtual lands gives you the power to decide what you want to do on your land. You can decide to rent it out, build up a solid and secure business for advertising or online sales.