“Why should I pay for an NFT if I can take a screenshot of it?” is one of the most frequent questions regarding NFT investment culture.
To better understand the question, let’s look at the traditions that have been around for decades. We all know about the Louvre and its most famous painting, the Mona Lisa The same question could be asked about Leonardo’s painting. Why pay millions of dollars for it when you can simply buy a ticket to the Louvre and take a picture of da Vinci’s artwork with your phone? Or it can be even easier – just open Wikipedia and save the picture on your desktop so you can enjoy Mona’s charm every day (FOR FREE).
Easy enough, right!? But even if you have a copy of Leonardo’s masterpiece that is 100% like the original, it wouldn’t be a genuine Mona Lisa. Without a certificate of authenticity to show that it is indeed the original, it will be considered a fake.
This is precisely why taking a screenshot of an NFT or saving а picture with a “right-click” is not enough to present yourself as the owner of the art. By being forever fully traceable on the blockchain, non-fungible tokens present the best solution to this dilemma, available to date.
A major element of the space is that most of the NFT collections are limited in supply. Rather than individual artworks, the whole collection is released, containing from 1 000 to 10 000 unique pieces. As a collection gets more trendy and recognized among the NFT community, demand for a limited asset drives the price to spike. For instance, because there will only ever be 10,000 CryptoPunks, millions of NFT investors want one. The collection becomes more and more valuable, creating increased demand, and higher prices.
NFT investment culture has exploded over the recent years with collections like CryptoPunks or Bored Ape Yacht Club having already turned into a status symbol of current digital times. Millions of people on Twitter, and other social media platforms, choose to use an NFT as their profile picture. That why they signal to the rest of the world that they are following the latest tech trends.
Many pay large amounts for clothes, boats, cars, and of course art. We already see more and more people who want to buy digital versions of art. Additionally, it is not a secret that the crypto scene is full of wealthy investors for whom a million or two is just pocket money. Acquiring such non-fungible tokens displays that you belong to a club of few and chosen ones.
Another reason for NFT investment culture rising in popularity is that they offer a new way to trade with digital assets. Unlike traditional investment vehicles and art, non-fungible tokens can be bought and sold quickly and easily. Because they’re based on blockchain technology, millennials see this new financial class as more secure.
NFTs & Traditional art
For years investors have been putting a ton of money into art due to its appreciation in value over time. With a market capitalization of around $65B in 2021 the commodity has proven to be a great investment vehicle and continues to be among the top asset classes. Additionally, non-fungible tokens offer an innovative way of trading and storing art.
Let’s start with the ownership. NFTs are not just digital assets, non-fungible tokens are unique because they are stored on the blockchain – the largest decentralized network. This new method of storing information in a decentralized manner acts as a certificate that proves ownership of genuine artwork. Plus, the information is available for anyone who would like to find out who holds the non-fungible token.
In addition to transparency, the blockchain comes with an easier way to transfer ownership. It is much simpler to buy and sell NFT compared to traditional art where you are required to hire an agency, schedule a physical auction, participate in it and take additional security measures when transferring the art. NFTs allow you to sell the art in a faster and more secure manner. Plus, the NFT market is much more liquid compared to the traditional one.
Another note is that the marketplaces (where the NFT sales are held) work 24/7 so you could transfer your artwork anytime regardless of where you are. You could be on your holiday in Hawaii or climbing Machu Picchu and still be able to sell your artwork. At the same time, the buyer could be on a safari in Africa or at a financial conference in London. All you both need is a good internet connection – the smart contracts will handle the whole transaction for you.
You already know that NFTs are stored on the blockchain that is visible to everyone allowing you to show your digital artwork to the world in virtual NFT galleries. You also have the ability to earn passive income from people who pay to visit the gallery or want to use the artwork as part of an advertising campaign. Unlike physical galleries, there are no limitations to exhibiting, such as paying hundreds of dollars just to transfer the art.
NFT investment culture is also changing the DeFi space. Staking NFTs is another innovative way to earn passive income. Decentralized finance platforms still allow you to borrow funds by setting your own terms without any banks or third parties. While putting unique tokens to work on the blockchain NFTs are transforming traditional finance.
NFT Investment Culture & Cryptocurrencies (Fungible Tokens)
Crypto and NFTs both live on the blockchain. Despite the fact that these two asset classes share one and the same home, they are quite different from one another.
The main difference is that NFTs are unique, and cryptocurrencies are not (or i.e., are fungible). One Bitcoin equals every other Bitcoin in value whereas, with non-fungible tokens, each one is a distinct entry on the blockchain.
The second is that non-fungible tokens have additional use cases in comparison to cryptos. Most NFT collections come with extra value for holders like special access to events, webinars, and discounts. Our Fragmint Genesis NFT collection, for example, gives holders a lifetime Super Power User status on the platform along with unlocking premium features. You can take ake a look at the myriad of benefits we have encoded on our official Genesis landing page.
Digital artworks encoded as non-fungible tokens also have an application in the metaverse. You could use your NFT avatar for meta concerts as well as like a pass for virtual festivals, serving to verify your identity. Their full utility is yet to be explored.
NFT Investment Culture & Real Estate
Is the virtual world eating the real one? When it comes to NFTs and real estate the answer is no. They are working together in order to break the limitations of the old-school process.
Right now, NFTs are used for social status but the technology behind them is revolutionizing how property rights are managed. Ownership of a token could be confirmed on the blockchain in seconds.
Companies that bring NFT innovation to real estate claim that the new process is fast, and transparent, as well as has lower transaction costs. According to them, It could take you around 20 minutes to close a real estate deal via the blockchain. The power of smart contracts will handle the whole transaction for you and the process is entirely online.
Final notes:
Non Fungible Tokens are a relatively new phenomenon but they are quickly growing in popularity around the globe. They provide a new way of expanding creators’ vision, building and growing communities, and providing extra benefits to collectors and investors. The space is an endless sea with many uncovered opportunities. NFT investment culture could help transact properties, play Web3 games, and participate in virtual concerts. However, like any other investment, they have their share of risks so researching a particular collection before purchasing is crucial for risk management.
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