How Do NFTs Gain Value?
NFTs are still a very new concept, and the best way to think about valuations is to treat an NFT like an antique - it's worth what a buyer is willing to pay!
Resale values for NFTs can be incredibly high, but most new NFT creators won't make their millions in a day - knowing how NFTs gain value and what to expect from a marketplace auction is a great place to start.
Who Decides an NFTs Worth?
Like all things crypto, a decentralised market doesn't have a handy price list or any static markers that can help you work out what your NFT should sell for!
If you create a stunning digital graphic using our VQGAN+CLIP AI text-to-image generator, you'll need to consider factors like:
- Rarity: the more limited the supply, the more valuable the asset.
- Capability: how your NFT can be utilised. For example, an NFT seller might configure assets with bonus features (check out Sorare as an NFT platform where buyers get fantasy sports perks).
NFTs work a lot like playing cards - there are millions of them on countless marketplaces, so your digital asset portfolio value will rely on interest, skill and demand.
Can NFTs Appreciate?
How do NFTs gain value if you're not adding anything new to the asset package?
The key is investor speculation and scarcity.
If an investor owns an NFT and decides to resell it, they can potentially make a very healthy profit if customer speculation determines the current value to be higher than they originally paid.
CryptoPunks is a great example.
In 2017, the collection first cost between $1.33 and $45 (AUD). Now, they're so popular and of such limited supply that each NFT from the collection sells for thousands or even millions of dollars!
Therefore, an NFT may be worth considerably more in the future than it is right now.
How Can I Make Money With NFTs?
The golden question is whether all this information means you could make a profit.
Perhaps the easiest way to supplement your income is to create your own NFTs and list them on marketplaces for a fixed price or via an auction.
Although new creators might not make a vast amount, to begin with, everyone has to start somewhere!
VQGAN+CLIP is the perfect place to start, with user-friendly functionality, up to five free digital graphics per day, and text-to-art capability, so you won't need to use any coding skills.
From there, it's all about picking marketplaces carefully and pitching your artwork at a reasonable price, but the rewards you get out of it can easily outweigh the effort you've put in; especially if you make a great sale!
NFTs can gain value and be a great way to make some side income, so although you'll need to set up a crypto wallet and buy some crypto to start selling, there isn't a huge amount of effort required to begin dabbling in the process.