Non-Fungible Tokens (NFT)
Let’s get to know NFTs
A non-fungible token (NFT) is a type of cryptographic token that represents a unique asset. Simply put, non-fungible tokens possess unique attributes that make it impossible for them to be replaced with other tokens.
While fungible token can be exchanged to any other token of the same type. If we make an analogy with the fiat currency – a dollar bill can be exchanged for any other dollar bill and that makes no difference for the holder. This is imperative for an asset that aims to act as a medium of exchange.
Why should I invest in Non-Fungible Tokens?
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 artworks can be tokenized, eliminating the duplication of such artwork and limiting ownership to the artist. This, in turn, creates scarcity for the artwork and hence, value for it.
It provides investors more liquidity: Tokenizing assets give investors more liquidity over their assets when they need it. For instance, 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 the potential for growth and development of the land sector. Pegging NFTs to real estate has been proven great potential for growth and development, for example, in real estate. Owning and controlling virtual lands give 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.
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