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4 Factors That Increase The Value of NFTs

Choosing the right NFT project to ape into depends on these factors.


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Gideon Akunana

3 months ago | 2 min read
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Spotting NFTs that would be valuable over time can be difficult.

I’ll show you four factors that easily influence the value of NFTs.

Choosing the right NFT project to ape into depends on these factors.

  • Scarcity
  • Subjectivity
  • Provenance
  • Utility

Don’t worry about these big words, I’ll break them down with related examples.

Scarcity

Let’s relate scarcity in NFTs to real-world assets.

One reason Gold bars are expensive is due to the fact that there are only a few of them.

The same thing goes for NFTs.

Looking back in 2017, when Ether Rock — Pet Rocks On The Blockchain launched 100 rocks through their game.

These collectibles of virtual rocks give a strong sense of pride in being an owner of 1 of the only 100 rocks in the game.

Subjectivity

One man’s trash is another man’s treasure.

Subjectivity is how your judgment is shaped based on personal taste, opinions, or feelings.

Relating subjectivity in NFTs, the value of an NFT can increase based on the desire of the individual.

For example, Person A attending a concert might spend thousands of dollars to secure premium seats, since he’s a fan of the artiste.

Person B, might not want to purchase an expensive ticket to see an artist.

Person A, placed a subjective value on the price to secure premium seats because it’s valuable to him based on personal feelings.

Beeple’s collage, Everydays: The First 5000 Days, sold at Christie’s.

Subjectivity also happened when Mike Winkelmann, known professionally as Beeple, sold a digital work of art for $69.3 million at Christie’s in 2021.

Beeple found a customer who understood the value of his artwork and was totally willing to pay.

The subjectivity of a customer is a factor in defining the actual value that an NFT holds.

Provenance

Provenance is a history of ownership of a work of art or an antique, used as a guide to authenticity or quality.

Let’s break it down further.

Provenance is a record of ownership of artwork over history.

Because there is a history of its owners hosted on the blockchain, it proves the authenticity of a piece of art.

Who wouldn’t like to own the same NFT owned or created by a celebrity or an influential brand?

The value of an object, artwork, or collectible is directly linked to who the owner is or who created it, could be an artist, an influential person, a major luxury brand, or a major sporting brand.

We saw this happen with VeeFriends and Jack Dorsey’s first tweet — Ex CEO Twitter.

Utility

The value of some NFTs depends on how they can be used.

Most use cases circle around gaming, the metaverse, PFP, ticketing, fashion, etc.

Currently, games are doing the most when it comes to utility.

Games like Axie infinityIlluvium, and NeoTokyo, have a play-to-earn policy that has brought them to the spotlight.

PFPs like CryptoPunks and Bored Ape Yacht Club have skyrocketed in value as more celebrities and influential personalities acquire them.

Certain NFT projects offer lifetime access to artists during concerts as use cases.

The ability of an NFT to be used in many ways is a bonus for any NFT owner.

Conclusion

These factors are just a few conditions that influence the value of NFTs.

There are so many other significant factors, I encourage you to DYOR before apeing into a project.

I share content around NFTs and blockchain generally.

Want to connect with me? Follow me on Twitter.

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Gideon Akunana

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Software Developer • NFT Content Writer

Everything Blockchain and NFT


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