Why Should You Invest In Non-Fungible Tokens (NFTs) | Motilal Oswal

Should You Invest In Non Fungible Tokens

After gaining momentum in 2017, NFTs (Non-Fungible Tokens) have been proved instrumental in the development and growth of the virtual world. This enabled land ownership in the virtual realm. The potential of virtual land economically is significant as it allows investors to construct a secure and solid business for online sales or advertising in the digital space. 

With no sign of slowing down, NFTs are the next big thing that you as an investor should consider investing in. Keep reading further to know why.

  • What are NFTs?

NFTs (Non-Fungible Tokens) are distinct tokens that can't be interchanged owing to their unique attributes. This also makes it impossible for them to be exchanged or replaced. NFTs are ERC-720 compliant which are mostly used to store crypto-collectibles like artworks. Therefore, they are registered under verifiable ownership. If you're interested then you can learn how to create an NFT to join in on the fun.

  • Why Should You Invest In NFTs?

NFTs constantly prove to be profitable as an investment option. Here are the reasons why:

  • Creates Tokenized Asset Value - With NFTs, physical objects such as artworks are tokenized. This eliminates the duplication of the art and limits the ownership to the artist. Thus, it helps in creating the scarcity of artwork and value for it.
  • Offers More Liquidity for Investors - Tokenized assets offer you, an investor, liquidity when you require it. For instance, if you own virtual land and decide to rent it to influencers or advertisers for a remuneration, then you're still the owner of the virtual space but only a part of it is liquified as rent.
  • Potential in Development and Growth - As mentioned before, the potential of NFTs for development and growth in the land sector is limitless. For instance, in the real estate sector controlling and owning virtual lands provides power to decide what to do with your land. You can either rent it or build a secure and solid business for online sales or advertising.
  • How to Invest in NFTs?

To know how to invest in NFTs, follow the given steps:

  1. Ethereum network is mostly used for transaction purposes. You'd require a token native to Ethereum (Ether) to purchase an NFT. Otherwise, you can also create an account on an exchange platform and buy the tokens there.
  2. You'd need a crypto wallet that is compatible with the Ethereum network. Crypto wallets are where you store your cryptocurrencies. You can utilize several platforms to open your crypto wallet. Go to your choice of platform's site to register a wallet with them. Once your wallet is ready, you need to send the Ether to your wallet's address which you purchased from the exchange.
  3. Go to your preferred marketplace to buy the NFT. 
    1. Register yourself at the marketplace and create an account.
  4. Link your wallet with the account you made at the marketplace. 
  5. Browse through the marketplace and select the NFT you want to invest in. You'll find yourself in an auction to purchase the NFT.
  6. Once you've successfully bid on the NFT, complete your transaction from your wallet. There might be a transaction fee involved depending on the marketplace.
  • To Sum Up:

If you think NFTs have potential as an investment option, then you should start investing soon. Remember that before you bid on one, you must conduct proper research.

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