NFT – Non Fungible Token

According to Google, it says Fungible means “of goods contracted for without an individual specimen being specified able to replace or be replaced by another identical item; manually interchangeable”. The token can be replicated and replaced, similar to a Bitcoin.

Whereas non-fungible is the opposite of that: unable to replicate or replace it with another, it is unique.

And token means like how Bitcoin is a token, or how coins are tokens that represents some value.

Hence, NFTs hold unique value

NFTs are unique because they are underlying on blockchains ; any attempt to duplicate of NFTs will be deemed “wrong” and cannot persist in the distributed ledger.

NFTs or Non-Fungible Tokens have been surging popularity in 2021. It was first established for half a decade and people are slowly adapting to this new trend. It is driving people to get in on the NFT mania, investing anywhere from hundreds of dollars to millions.

The pandemic created a big impact to cryptocurrency industry whereby many are moving from traditional investments to NFTs hoping for better profits. Recently Bitcoin has a high record, topping $60,000. Since then, people continuously invest into NFT looking for a better income.

It depends. The answer relies on the scarcity, hedonic value, age, and popularity of the token.

Scarcity is the undersupply of an NFT’s value which is determined by its creator (rare collectible). The authenticity of the NFT can be verified by their unique IDs and their metadata – data that provides information about other data. In other words; the rarer an item, the higher its value.

Hedonic value comes into play when valuing an NFT. This refers to how much enjoyment the consumer gets out of the product.

Age is the most important part in the valuation of an NFT. An aged NFT is as valuable as any famous painting. Their metadata which details their longevity on the Ethereum blockchain is what adds to their desirability.

Popularity plays an important role in the valuation of an NFT, thus adding to the speculation and interest around it. Industry executives have pointed out that NFTs will gradually shift to cross-platform communities that facilitate their trade and merchandising. The idea is to incorporate NFTs into various formats and travel across various blockchain platforms.

“In 2021 Augsut, VISA joined the NFTs club and bought CryptoPunk #7610 for US$150,000”