{"id":6987,"date":"2024-08-09T16:35:28","date_gmt":"2024-08-09T14:35:28","guid":{"rendered":"https:\/\/moneyhub.ee\/?p=6987"},"modified":"2025-04-22T13:48:55","modified_gmt":"2025-04-22T11:48:55","slug":"nft-investing","status":"publish","type":"post","link":"https:\/\/moneyhub.ee\/en\/useful\/articles\/nft-investing\/","title":{"rendered":"What are NFTs, and why are they worth investing in?"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"6987\" class=\"elementor elementor-6987\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-45b825c2 e-flex e-con-boxed e-con e-parent\" data-id=\"45b825c2\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-28b6be56 elementor-widget elementor-widget-shortcode\" data-id=\"28b6be56\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"shortcode.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-shortcode\"><nav aria-label=\"breadcrumbs\" class=\"rank-math-breadcrumb\"><p><\/p><\/nav><\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-21e66ece e-flex e-con-boxed e-con e-parent\" data-id=\"21e66ece\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t<div class=\"elementor-element elementor-element-22863997 ddddf e-flex e-con-boxed e-con e-child\" data-id=\"22863997\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-1052e605 elementor-widget elementor-widget-heading\" data-id=\"1052e605\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">What are NFTs, and why are they worth investing in?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-6c3c8736 e-flex e-con-boxed e-con e-parent\" data-id=\"6c3c8736\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-528bdef5 elementor-widget elementor-widget-image\" data-id=\"528bdef5\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"2240\" height=\"1260\" src=\"https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17.png\" class=\"attachment-full size-full wp-image-6992\" alt=\"nft investing\" srcset=\"https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17.png 2240w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17-300x169.png 300w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17-1024x576.png 1024w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17-768x432.png 768w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17-1536x864.png 1536w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17-2048x1152.png 2048w\" sizes=\"(max-width: 2240px) 100vw, 2240px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-73965956 e-flex e-con-boxed e-con e-parent\" data-id=\"73965956\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-2feb390c elementor-widget elementor-widget-heading\" data-id=\"2feb390c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">NFTs are commanding exorbitant sums of money. But what are they, and are they worth investing in as an alternative investment?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-69bd9102 elementor-widget elementor-widget-text-editor\" data-id=\"69bd9102\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">A digital-only artwork by <\/span><a href=\"https:\/\/techcrunch.com\/2021\/03\/11\/beeples-69-million-nft-sale-marks-a-potentially-transformative-moment-for-the-art-world\/?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&amp;guce_referrer_sig=AQAAAGw8TL867J0bz7LyqDo6DLl0rLM3iFnVJzwOu58QS0WZWtto0kZGhEPQZ5WyaSXVBzysSzXoc8dsJbojLbjgc45UiYEsgGx6sqHX_5WKq8eo85YflxmuR87q408MigBYiplGgU-zS4Y0vQSNj4Ck3ZdD_whwf9wxT6MkJ119UXjG#:~:text=Today%2C%20the%20auction%20of%20an,Winkelmann%20%E2%80%94%20known%20online%20as%20Beeple.\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Beeple sold at Christie&#8217;s auction house for a whopping $69m<\/span><\/a><span style=\"font-weight: 400;\">. However, the bidder will not get a physical artwork like expected.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Instead, the winning bidder will receive a unique digital token, a non-fungible (NFT).<\/span><\/p><p><span style=\"font-weight: 400;\">If <a href=\"https:\/\/moneyhub.ee\/investments\/crypto-brokers\/\">Bitcoin<\/a> is the digital answer to currency. Then NFTs are the digital answer to collectables.<\/span><\/p><p><span style=\"font-weight: 400;\">However, despite the enormous amounts quoted and traded, some believe that NFTs are a bubble that will burst soon.<\/span><\/p><h2><span style=\"font-weight: 400;\">What is an NFT?<\/span><\/h2><p><span style=\"font-weight: 400;\">NFT is short for &#8216;non-fungible token.&#8217;<\/span><\/p><p><span style=\"font-weight: 400;\">A fungible asset is a unit that can be interchanged with the same value it initially held, much like money is today.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">People can exchange two 10 euro notes and receive a \u20ac20 note in return; the value remains the same, whether as two banknotes or one = \u20ac20.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">However, a non-fungible unit cannot be interchanged with something else. It could be a car, a house or artwork like The Last Supper.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">It is one of a kind.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">You can take a photo of the picture or buy a copy, but it will never be the original.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Non-fungible tokens are &#8216;one-of-a-kind&#8217; assets that can be digitally bought and sold like any other asset.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">These digital tokens can be surmised as certificates of ownership for virtual or physical assets.<\/span><\/p><h2><span style=\"font-weight: 400;\">How do NFTs work?<\/span><\/h2><p><span style=\"font-weight: 400;\">One-of-a-kind assets are highly valued. Think of an artist&#8217;s painting like the Mona Lisa; the original cannot be duplicated. Thus, it has become very valuable and can fetch large sums if ever sold.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">However, with a digital asset, others can quickly and endlessly duplicate digital files &#8211; they create a &#8216;copy.&#8217;<\/span><\/p><p><span style=\"font-weight: 400;\">To ensure originality, a piece of artwork can be &#8216;tokenised&#8217; to create a digital certificate of ownership that could be bought and sold and guarantees that the token holder has the original.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Much like <a href=\"https:\/\/moneyhub.ee\/investments\/crypto-brokers\/\">cryptocurrency<\/a>, the record of who owns what is stored on a ledger is known as the <a href=\"https:\/\/moneyhub.ee\/investments\/crypto-brokers\/\">blockchain<\/a>.<\/span><\/p><p><span style=\"font-weight: 400;\">Fraudsters, hackers and those wishing to copy files cannot forge the records because the ledger is maintained by thousands of computers worldwide.<\/span><\/p><p><span style=\"font-weight: 400;\">Furthermore, NFTs can contain smart contracts that could remunerate the artist for any cut if the token is sold as part of a future sale.\u00a0<\/span><\/p><h2><span style=\"font-weight: 400;\">If anyone can copy digital art, won&#8217;t it lose its value?<\/span><\/h2><p><span style=\"font-weight: 400;\">It depends on your perspective.<\/span><\/p><p><span style=\"font-weight: 400;\">Beeple&#8217;s $69m artwork has been copied and shared across the internet, with millions viewing it.<\/span><\/p><p><span style=\"font-weight: 400;\">Even the artist retains the copyright ownership so he can produce more copies if he so wishes.<\/span><\/p><p><span style=\"font-weight: 400;\">However, the buyer or holder of the NFT owns the &#8216;token&#8217; that proves they own his original work. Think of it as having the only copy of an autographed artwork.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Because of this, prices for NFTs have skyrocketed.<\/span><\/p><h2><span style=\"font-weight: 400;\">How much are NFTs worth?<\/span><\/h2><p><span style=\"font-weight: 400;\">Recent headlines of multi-million-dollar sales have fueled interest in the NFTs, and not only for digital artwork.<\/span><\/p><p><a href=\"https:\/\/www.bbc.co.uk\/news\/world-us-canada-56307153\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Twitter&#8217;s founder and CEO, Jack Dorsey, has promoted an NFT of the first-ever tweet<\/span><\/a><span style=\"font-weight: 400;\">, with bids beginning at <\/span><b>$2.5m.<\/b><\/p><p><span style=\"font-weight: 400;\">Musician Grimes <\/span><a href=\"https:\/\/www.bbc.co.uk\/news\/technology-56252738\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">sold some of her digital art for more than <\/span><b>$6m<\/b><\/a><span style=\"font-weight: 400;\">.<\/span><\/p><p><span style=\"font-weight: 400;\">Even the animated Gif of Nyan Cat &#8211; a 2011 meme of a flying pop-tart cat &#8211; <\/span><a href=\"https:\/\/foundation.app\/NyanCat\/nyan-cat-219\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">sold for more than <\/span><b>$500,000<\/b><\/a><span style=\"font-weight: 400;\">!<\/span><\/p><p><span style=\"font-weight: 400;\">However, as with cryptocurrencies, there is so much written about how they will always rise in value, yet because it is so easy to create an NFT, <\/span><a href=\"https:\/\/cointelegraph.com\/news\/nft-prices-will-eventually-crash-says-litecoin-creator-charlie-lee\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">market saturation could easily implode.\u00a0<\/span><\/a><\/p><p><span style=\"font-weight: 400;\">Simply put, having too much of one asset class will likely lose value as it becomes less scarce.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Could this dent the demand for NFTs?<\/span><\/p><h2><span style=\"font-weight: 400;\">Is investing in NFTs worth it?<\/span><\/h2><p><span style=\"font-weight: 400;\">Because of the high sums mentioned above, NFTs attract investors considering the resale values that all artwork pieces can command.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">As with physical artwork, owning the art itself does not make the holder rich. It sells the art to the highest bidder willing to pay for it, which enriches the holder.<\/span><\/p><p><span style=\"font-weight: 400;\">If an investor can purchase a high-value NFT and sell it for more than they paid, they can make a considerable alternative investment profit.<\/span><\/p><p><span style=\"font-weight: 400;\">However, not all understand the potential (or lack thereof) value because NFTs are a relatively new investment class.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Unlike the stock market, where the stock price is how much the investment is worth, it is hard to price digital art. Especially as NFTs are often very illiquid.<\/span><\/p><p><span style=\"font-weight: 400;\">Investors can buy stock at a specific price and then sell it when it&#8217;s at a higher price, making them a profit in the process.<\/span><\/p><p><span style=\"font-weight: 400;\">However, the value of digital art depends on how much someone is willing to pay for it, making NFTs a precarious investment.<\/span><\/p><p><span style=\"font-weight: 400;\">NFTs are <\/span><b><i>highly speculative <\/i><\/b><span style=\"font-weight: 400;\">because it&#8217;s hard to determine how much a tweet, meme, or image is worth to someone else. What may seem valuable to you at the time may be worthless to others, meaning you may not be able to sell the NFT.<\/span><\/p><p><span style=\"font-weight: 400;\">NFTs are interesting, although they are not suitable for all investor types. Those who wish to consider this alternative investment should only buy what they can afford to lose.<\/span><\/p><p><span style=\"font-weight: 400;\">As always, it&#8217;s a solid idea to keep the majority of your funds in less risky investments, such as index funds, physical artwork, or P2P.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">When most of your portfolio is invested in lower-risk ventures, you may wonder whether you have some funds to spare to invest in NFTs.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Alternatively, you can observe others attempt to monetise NFTs from the sidelines before deciding to invest in this strategy.\u00a0<\/span><\/p><h2><span style=\"font-weight: 400;\">Are NFTs just a bubble?<\/span><\/h2><p><span style=\"font-weight: 400;\">Digital artists have always struggled with copyright and plagiarism of their artwork.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Artists can add their artwork to social media platforms and online galleries with the ability to make a profit.<\/span><\/p><p><span style=\"font-weight: 400;\">However, the caveat to this ease is that it only takes a few clicks for others to copy and download the work for private use without compensating the artist.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">As discussed above, NFT solves this problem by acting as a virtual certificate of authenticity. Essentially it ties the original digital artwork with the token, thus giving the digital image a higher value as if it had an artist&#8217;s signature on the physical artwork.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">The certificate of authenticity or token cannot be forged or copied by anyone as it exists on the blockchain.<\/span><\/p><p><span style=\"font-weight: 400;\">And yet, there are concerns that this precarious and speculative bubble could crash despite this authenticity, bringing down inflated investor prices with it.<\/span><\/p><p><span style=\"font-weight: 400;\">Digital artwork relies on manufactured <\/span><a href=\"https:\/\/policyreview.info\/open-abstracts\/digital-scarcity#:~:text=Digital%20scarcity%20is%20a%20credibly,and%20used%20entirely%20digitally.%E2%80%9D%20(\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">digital scarcity<\/span><\/a><span style=\"font-weight: 400;\"> &#8211; if there is less of something unique, like an NFT piece of work, the price remains high because it is \u2018one-of-a-kind.\u2019\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">But if artists decide to sell multiple tokens on one piece or the market does not care for digital scarcity (think music downloads), the price of NFTs could drop for prospective collectors or buyers.\u00a0<\/span><\/p><h2><span style=\"font-weight: 400;\">The future of NFTs<\/span><\/h2><p><span style=\"font-weight: 400;\">Much of the generated value in NFTs is indeed speculative.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">The biggest cryptocurrencies, Bitcoin and Ethereum, and even the gimmick Dogecoin, began the same way. Two of them (Bitcoin and Ethereum) have become global currency exchange mainstays.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">What may seem ludicrous to pay for a digital token now could become the norm shortly.<\/span><\/p><p><span style=\"font-weight: 400;\">NFTs can provide long-term value creation for artists and businesses in the long term.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Gaming companies and even the <\/span><a href=\"https:\/\/cointelegraph.com\/news\/nba-top-shot-leads-nft-explosion-with-230m-in-sales\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">NBA have devised ways to use NFTs<\/span><\/a><span style=\"font-weight: 400;\"> for profit.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">NFTs may be considered a bubble, but they will be here to stay.\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>NFTs are commanding exorbitant sums of money. But what are they, and are they worth investing in as an alternative investment?<\/p>\n","protected":false},"author":3,"featured_media":6992,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-6987","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles"],"acf":[],"blog_post_layout_featured_media_urls":{"thumbnail":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17-150x150.png",150,150,true],"full":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17.png",2240,1260,false]},"categories_names":{"21":{"name":"Articles","link":"https:\/\/moneyhub.ee\/en\/category\/useful\/articles\/"}},"tags_names":[],"comments_number":"0","rttpg_featured_image_url":{"full":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17.png",2240,1260,false],"landscape":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17.png",2240,1260,false],"portraits":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17.png",2240,1260,false],"thumbnail":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17-150x150.png",150,150,true],"medium":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17-300x169.png",300,169,true],"large":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17-1024x576.png",800,450,true],"1536x1536":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17-1536x864.png",1536,864,true],"2048x2048":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-17-2048x1152.png",2048,1152,true]},"rttpg_author":{"display_name":"David Bailey","author_link":"https:\/\/moneyhub.ee\/en\/author\/davidbailey\/"},"rttpg_comment":0,"rttpg_category":"<a href=\"https:\/\/moneyhub.ee\/en\/category\/useful\/articles\/\" rel=\"category tag\">Articles<\/a>","rttpg_excerpt":"NFTs are commanding exorbitant sums of money. But what are they, and are they worth investing in as an alternative investment?","_links":{"self":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/posts\/6987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/comments?post=6987"}],"version-history":[{"count":0,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/posts\/6987\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/media\/6992"}],"wp:attachment":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/media?parent=6987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/categories?post=6987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/tags?post=6987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}