NF what … that’s right, it’s a NFT (Non-Fungible Token) which is a token of ownership of an asset. For example, a digital piece of art, concert ticket, or even a highlight video of your sports icon. In some ways, a NFT is the evolution of the cryptocurrency market.
Technology Behind a NFT
The technology that proves the ownership of a NFT is the same technology that bitcoin uses to guarantee authenticity and track ownership, simply known as the blockchain. The value in a NFT is derived from its rarity, which is driven by supply and demand and therefore gives them a meaning of value for collectors.
The latest sign of the NFT mania was last week’s Christie’s auction of a piece of digital art from an artist known as Beeple, which sold for an insane $69,346,250 (noted, and to no surprise, the transaction was paid for in Cryptocurrency).
Are NFT’s Good Investments?
So we are now at a stage of insanely high valuations in Cryptocurrency, NFT’s, collectibles just to name a few. Much of the cause behind these areas of valuation is inflation created by money printing of world economies. Put simply, excess paper flooding into markets looking for any means of a real return, causing credible forms of speculation on anything where demand outstrips supply due to rarity. How does this end? Well, we are in one word, BEARISH.