This is simply a case of supply and demand. The key here is the supply side that drives up the value of NFTs. Since there is only one individual asset, high demand can lead to significant increases in value.
Taking the Mona Lisa as an example, experts estimate the value of the Mona Lisa at more than $800m. Had Leonardo da Vinci painted numerous Mona Lisa paintings to exactly the same quality, these would be fungible. Their value would also be significantly less than the single painting thought to be edging towards $1 billion.
As the NFT market expands, the number of NFTs are likely to increase significantly. At this stage, demand will likely become the key price dictator.
Market appetite will continue to dictate value. A unique NFT of interest versus one of little interest to collectors and investors will vary significantly in price.
For example, Twitter CEO Jack Dorsey recently tweeted a link to a tokenized version of his first-ever written tweet.
Bids have reportedly reached in excess of $2.5 million. Other Jack Dorsey tweets are unlikely to have a collectible value, however, even though each tweet is unique.
How do I buy or trade NFTs?
For those looking to buy or trade NFTs, identifying the right marketplace is the first step.
There are numerous market places at present that cater to different areas of the collectible world.
For instance, NBA Top Shot is a marketplace for those looking to buy video highlights. Cryptoslam! is a site that lists the largest market places by sales volume for those looking to enter the NFT space.
There is also Sorare, which is a fantasy soccer marketplace, where you can manage, and buy and sell virtual teams. At the time of writing, Sorare ranked fifth on the all-time sales list, with $24.41m in total sales.
CryptoPunks ranks 2nd on the all-time sales volume list has 10,000 uniquely generated characters. Each can be officially owned and proof of ownership is logged on the Ethereum blockchain.
While there are many market places, those wanting to purchase an NFT will need an NFT wallet in order to store any purchased NFTs.
There are a number of NFT wallet providers in the marketplace. As with cryptos, NFT holders must store-purchased NFTs securely. Hard wallets would be more secure, protecting NFT holders from hackers.
When it comes to purchasing NFTs, some market places support purchases with a credit card. Others, however, require purchases with Ethereum.
For Ethereum purchases you will need to fund your NFT marketplace account with Ethereum to proceed.
To purchase your NFT, most market places sell NFTs in an auction. You simply need to place your bid and wait until the conclusion of the auction.
If your bid was successful, your account would be debited and your NFT wallet credited with your newly purchased NFT.
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