Understanding NFTs: Why They Would Make Excellent Investment Assets
Referred to as the "Oracle of Omaha," Warren Buffett is viewed as one of the most successful investors in history. Following the principles set out by Benjamin Graham, he has amassed a multibillion dollar fortune mainly through buying stocks and companies through Berkshire Hathaway.
Today Investable assets come in all shapes, forms and value. More than just stocks and companies, investors today are putting their money heavily into real estate, art, wine, whiskey, luxury watches and the list goes on and on.
In recent years, digital assets were all the hype and yet was labeled the most controversial. But instead of shunning it entirely, let us take time to understand the advantages of the underlying technology and the potential impact if it is properly applied.
When one talks about blockchain technology, immediately cryptocurrencies (Fungible Tokens) and NFTs (Non-Fungible Tokens) come to mind. We saw how NFTs had a substantial impact on industries such as Art, Music, GIFs, and Fashion. The difference with Fungible Tokens is that NFTs cannot be interchanged like Cryptocurrencies. While Cryptocurrencies such as Bitcoin and Ethereum work like dollars that are produced massively and can be exchanged, NFTs are uniquely made with limited single editions. Having an NFT means you get exclusive ownership of a digital asset.
The hype on these digital assets are that they are on a decentralised blockchain which offers greater security and transparency in the whole transaction process. Here are three reasons why NFT investment could be a real game-changer.
#1: NFTs are accessible worldwide, anytime, anywhere.
The NFTs market is open all day, everyday. This means you have the flexibility of buying and selling at any time. Some of these marketplaces that offers NFTs transactions are OpenSea and Binance.
#2: Increased market efficiency.
Assets are becoming distinctly more digital. This enables their authentication process to become increasingly easy, further streamlining transactions and reducing costs. NFTs are increasing the efficiency of transactions and reducing the costs of third parties. More than ever, consumers of today want fast, efficient, and secure transactions.
#3: Proof of Ownership
Each NFT is unique and every NFT transaction is verified on the blockchain. This makes tracing the creation origin and current owner very easy. As an investment asset of the future, this makes way for authentic transactions and ownership status.
What are the factors that affect the price of an NFT?
Looking at one of the most expensive NFTs ever sold, the “First 5000 days” by Mike Winkelmann who, also known as Beeple, was acknowledged for his effort over the years in creating the artwork and making it one of the most expensive NFTs in the world that cost $69.9 million. Second, the rarity of the NFT also determines the value of the NFT. Last but not least, celebrity or famous influencer endorsement adds to the price as well.
As such, luxury brands are getting in on the NFT wagon. To celebrate their 200 years of fashion, Louis Vuitton made an adventure-based game called “Louis: The Game” where players that complete the quest can collect their limited edition NFT.
How to invest in an NFT?
To buy an NFT, most of the time you will need to have funds in the form of cryptocurrencies such as Bitcoin or Ethereum. Start by setting up your account and purchase the number of cryptocurrencies needed into your digital wallet for the transaction. From there, go to the marketplace listing the NFT of your choice and perform the transaction through your digital wallet.
Combining NFTs with the Future of Electric Yachting
At Vivire, we are simplifying not only a complex initial build process but the sustainability of the yacht by integrating all design and build data into a Smart Contract. NFT holders will not only receive their very own luxury yacht as a physical asset but will also have special access to ongoing benefits that are both virtual and in the real world such as docking privileges, event invites, software access, etc. Yacht owners will also be able to easily resell their yachts in the future simply by listing their NFT.
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