Reasons why you should invest in Non-Fungible Tokens (NFTs)

May 19, 2020

Non-fungible tokens (NFT) are a unique kind of tokens that are not interchangeable due to their individual distinctive attributes. Simply put, non-fungible tokens possess unique attributes that make it impossible for them to be replaced or exchanged.

They are ERC-720 compliant, and have been mostly used in the storage of crypto-collectibles such as arts; providing a means of proving authenticity and ownership, and in crypto gaming. Non-fungible tokens are tokenized versions of digital or real-world assets.

NFTs gained momentum in 2017, following the launch of crypto game known as CryptoKitties. As an early pioneer of NFTs, the game Cryptokitties provided players the ability to collect, store genetic materials, breed and sell virtual cats. Amazing right?

As at December the same year, CryptoKitties transactions on the ethereum network skyrocketed, amounting for more than 12,000 transactions which resulted in an increase in the birthing fee for kittens. (See this tweet)

NFTs have also been instrumental in the growth and development of virtual lands, and as a result enabled ownership of lands in the virtual space. The economic potential for virtual lands are very significant as it enables inevstors build up a solid and secure business for advertising or online sales in the digital space.

OVR, an augmented reality and ethereum blockchain-powered platform, is trailing this path by providing users with the opportunity to own virtual lands using a non-fungible token known as OVRland.

OVR is expected to begin auction for OVRlands at the end of this month of May, therefore get set to own your land in the virtual space.

Why Should I Invest in Non-Fungible Tokens?

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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 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.