What Are NFTs? A Guide for Investors

NFTs are non-fungible tokens. Fungibility refers to assets of the same kind that can be traded interchangeably

Bitcoins, for example, are fungible, because users can trade one Bitcoin for another and it will be the exact same asset.

Since NFTs are non-fungible, each token is unique and cannot be replicated

Because of this distinct characteristic, NFTs are represented as unique information on a blockchain

ensuring integrity of digital ownership

This record of original ownership cannot be changed, since its existence is time-stamped on the blockchain

Aside from art, this can be anything from intellectual rights to a title of ownership to an asset.

Buying and Selling NFTs as Investments

The traditional principle of investing, buy low and sell high, also applies for NFTs

NFTs are not like a stock or a bond where you have a quantifiable idea of the intrinsic value of the investment aside from its market value

They have a market value that's driven purely by what the crypto community is willing to pay for them.

investors can think about NFTs as a commodity-like asset similar to silver, gold and art

You have to find NFTs that align with what your portfolio growth (strategy) is, just like any other investment

An NFT can be a legitimate investment if investors understand what the NFT is being used for

"The life span of the use case ... is the life span of that utility."

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