Non-Fungible Assets
Let's take a dive into the non-fungible assets?
A non-fungible asset is one-of-a-kind. It is unique, irreplaceable and non-interchangeable. Examples include diamonds and original works of art. Each of these assets has unique qualities that cannot be authentically replicated. For instance, every diamond has a distinct cut, color, size and grade. Like the fingerprint of a human being, no two diamonds are exactly the same. NFTs are a digital version of non-fungible assets, powered by the blockchain, which make them safe and reliable.
Benefits of investing in non-fungible assets
Benefits of investing in non-fungible assets
The most obvious benefit of NFTs is their potential to make markets more efficient. The conversion of a physical asset into a digital one can streamline processes, eliminate intermediaries, enhance supply chains and bolster security. Thus, investing in NFTs puts one at the center of benefits from this utility.
Today, it’s difficult to fractionalize ownership of certain assets, including real estate, artwork and fine jewelry. It is much easier to divide a digitized version of a building among multiple owners than a physical one. Through digitization, the market for certain assets can be greatly expanded, leading to greater liquidity and higher prices. On an individual level, it can enhance the way financial portfolios are constructed, allowing for greater diversification and more precise position sizing.
NFTs are created using blockchain technology, which is a system of recording information in a way that is impossible to hack, alter or delete. All NFTs stored on the blockchain have distinct records of authenticity and chain-of-ownership, which, theoretically, prevents them from being subject to mishandling and theft. This implies each NFT’s scarcity and authenticity are preserved, fostering a level of confidence we’re not accustomed to seeing in many markets.
NFTs are different from traditional investments, such as stocks and bonds. They have distinctive qualities and offer benefits we are only just beginning to comprehend and realize. NFT risk profile is different from that of other asset classes. As a result, by adding NFTs to an investment portfolio, you could improve its efficiency. Basically, this means achieving a better balance of risk and return.
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Types of non-fungible assets
Types of non-fungible assets
Digital artworks
These are mainly digital artworks that come with a public certificate of authenticity and ownership issued by the digital ledger on which they are stored. The most expensive NFT sold is the digital artwork ‘The First 5000 Days’ by artist Beeple for a whopping $69.3 million in March 2021 in a Christie’s auction.
Collectibles
Collectibles are the first type of NFTs to be ever launched. They are the same as physical collectibles, like Pokemon cards or vintage mint condition toys but in digital form. Curio Cards were the first major NFT collectibles ever launched after which several other collectibles like Bored Ape Yacht Club, Cryptopunks, Cat Colony, Meebits, etc. have taken off. They are a collector’s delight and Bored Ape Yacht Club has turned out to be the most valuable digital collectibles out there.
Video game assets
These are NFT-based video games that players get involved in to win rewards like cryptocurrency, digital assets, or other NFTs. The very first NFT video-game asset was the game Axie Infinity after which games like CryptoKitties, Gods Unchained, Sorare, etc became very popular amongst video game players.
Music
This is one of the newest phenomena in NFT mania. Artists pre-release their albums on NFT marketplaces before releasing them on traditional streaming platforms and buyers can buy a part of the album, like say a share in it, and then when the album is released via traditional channels, the buyers get to have a share in the profits of the album.
Ticketing
The onset of NFTs has introduced various innovations in the way day-to-day transactions take place and ticketing has not been left behind. Tickets for events can be minted now on blockchain platforms and then can be auctioned off by the organizers. NFT tickets can also be sold at a fixed price. This would significantly reduce forgeries and add a sense of memorabilia because these tickets can also be stored and resold as collectibles.
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