This content originally appeared on HackerNoon and was authored by Vygha
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"Art is not a thing; it is a doing." - Paul Klee
\ Today, the world of NFTs, which is a huge kingdom of its own, has taken the art arena by storm. Believe it or not, these digital assets that represent unique ownership of digital items have indeed skyrocketed in popularity as well as great value. Of course, although many different factors contribute to the cost/price of an NFT, certain key factors significantly influence its cost to a greater extent. \n
In this blog post, I will give you a smooth ride into the top 5 factors that determine the price of NFT art so that you can decide whether you have enough in your pocket to invest in the same.
\ Obviously, who would want a hole in their pocket? HEHE….. \n
Let’s jump right into it!!!
Number 1
The Reputation Of The Artist and the Following
Ummm! Maybe you are an artist with a minimal number of followers. So in that case would you be able to sell your NFT? While you can, the hard truth is that the chances are way too low.
\ One of the critical factors affecting an NFT’s price is the artist’s reputation and the number of followers. Very established artists with a proven reputation and track record with a loyal fan base are more likely to gather higher prices for their digital creations. It is their name recognition and creative, artistic expertise that lend credibility and desirability to their NFTs. Nevertheless, the size and engagement of an artist’s social media platform and following can also significantly influence the value of their NFT work.
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**Let’s see an example: \
Just imagine that you are trying to sell an NFT of a pixelated cat. The artist is a very, very renowned master of fine art, who is known for their intricate oil paintings. Although the cat might seem too cute, it is very unlikely that it will fetch a high price. The mismatch between the artist’s reputation and the NFT’s content would be literally like trying to sell a Ferrari to a person who only knows how to drive a bicycle. True right?
Number 2
Being Rare and Unique
The most important elements that drive up the price of NFTs are its rarity and uniqueness. Limited edition or one-of-a-kind pieces are highly sought after by collectors, who are really willing to pay a premium for exclusive, rare digital assets. Various factors such as the number of copies available, the incorporation of specific varied features, or the artist’s creative techniques can contribute to the perceived rarity and uniqueness of an NFT.
\ Think about it….
\ Someone comes to you, and they tell you that they had a one-of-a-kind NFT of a digital potato… Would you even buy it? Probably not! I would definitely not! But…but…but what if they told you it was the last potato on Earth and the only way to save humanity from starvation was to buy it? That’s the catch! Now you might be more inclined to pay a hefty price for it! True right?\
Number #3
Utility and Functionality
Believe me! NFTs can offer more than just digital art; they can indeed also provide utility and functionality. For example, some NFTs come with rare exclusive access to physical products, experiences, or virtual communities. These additional benefits can for sure enormously increase the perceived value of an NFT and attract buyers who are seeking both aesthetic and practical value.
\ Imagine this…
\ You have bought an NFT of a digital painting. But instead of just looking at it on your screen, you can also use it as a wallpaper for your virtual reality headset. Niceee right? Now you have a unique and immersive experience that you can share with your friends.
Number #4
The Evolving Market Trends and Hype
Let me tell you! Market trends and hype can play an important role in determining the price of NFTs. Of course, when a particular artist, collection, art, or genre gains popularity, it can create a frenzy and huge demand, driving the prices high. However, it’s important to be cautious of speculative bubbles and ensure that you’re investing in NFTs based on intrinsic value rather than short-term hype. It's better to be a MASTER than to be a FOOL.
\ Think about it…
\ Do you remember Beanie Babies? They were all around the rage for a while, and people were paying enormous prices for them. But then all of a sudden the hype died down and they were worth almost nothing. The same can happen with NFTs if the market becomes saturated or people lose interest in it.
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Number #5
Blockchain Technology and Platform
Fact is a fact. The underlying blockchain technology and platform used to create and trade NFTs can also largely impact their price. Consider Ethereum! Ethereum, being one of the most popular blockchains for NFTs, has a well-established ecosystem and a large community of developers and collectors. Nevertheless, other blockchains with varied features or lower transaction fees may also emerge as viable options for NFT creators and buyers. \n
Take this example…
\ What if you are trying to buy an NFT on a novel blockchain that no one has even heard of? It might be really cheaper, but there’s also a significant risk that the platform could collapse or be hacked. SCRAYYYY!! It’s like buying a car from a shady used car salesman-you might get a really great deal, but you're also taking a risk.
\ So now having read all this, the question is: DO YOU HAVE ENOUGH IN YOUR POCKET TO JOIN THE NFT ART MARKET?
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\ The cost of NFTs can vary widely, from a few dollars to millions to crores. While it’s tempting to jump on the bandwagon and invest in the latest trending NFTs, it’s essential to conduct thorough research and consider your financial goals. If you are really passionate about art and believe in the potential of NFTs, then it might be worth exploring this exciting market. However, always approach investments with great caution and be prepared to face potential risks. \n
Remember, the value of an NFT art is subjective and can indeed fluctuate over time. The best strategy is to invest in pieces that you genuinely appreciate and love and believe will hold their value in the long term. By understanding the key factors that influence NFT prices and conducting due diligence, you can make informed decisions and potentially reap huge rewards from this ever-growing innovative market.
\ So now the question is
\ DO YOU HAVE ENOUGH MONEY IN YOUR POCKET TO INVEST IN LATEST TRENDING NFTs? \n
Let me know your thoughts in the comments!
This content originally appeared on HackerNoon and was authored by Vygha
Vygha | Sciencx (2024-08-27T10:09:00+00:00) Top 5 Factors That Affect the Cost of NFT Art – Do You Have Enough In Your Pocket?. Retrieved from https://www.scien.cx/2024/08/27/top-5-factors-that-affect-the-cost-of-nft-art-do-you-have-enough-in-your-pocket/
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