Long-Term Value of NFTs

Is there a long term value in NFTs?

NFTs had their first big hype in 2021 and it seems like their growth can not be stopped. But was this just pure hype or is there a real future for Non-Fungible Tokens? Most people who have heard of NFTs think that they are simply nothing more than overpriced pictures on the internet, but this technology is much more than this. This article will take a look in the future and answer the question if NFTs have a long term value. But first it should be clear what NFTs actually are.

What is a NFT?

The word NFT is short for „Non Fungible Token“. First of all we need to clarify the term „token“. A cryptocurrency that is operating on an existing blockchain is called „token“. A cryptocurrency that has its own Blockchain is a „coin“. Therefore, Bitcoin is a coin for example, as its Blockchain is running on its own. Then there are cryptocurrencies like Loopring for example, which operate on the Ethereum Blockchain, therefore they are tokens. If you have traded NFTs before, you would know how you pay a specific cryptocurrency for it, most likely ETH or SOL. That is because these NFTs are simply Tokens on the Ethereum or Solana Blockchain (Or other platforms), but there is a key difference between these types of tokens and regular ones.

That is where the term „Non fungible“ comes in. A token can be both fungible (exchangeable) and non-fungible (non-exchangeable). Basically, “non-exchangeable” in this regard simply means that it is a unique digital asset that cannot be exchanged one-for-one for another. Maybe you have heard of the mis-stamping/printing of coins or banknotes before. Basically, they are still normal FIAT currencies. However, due to their uniqueness thanks to their factory flaw, they are much more rarer and valuable. A collector will not value a normal $100 bill the same way as a $100 bill with factory flaws, most of the time they are truly unique. The normal bill is therefore „fungible“ as it can be replaced 1:1 by another $100 bill, the misprinted one can not. To be honest, it is kind of wrong to compare FIAT currencies to cryptocurrencies, but hopefully you understood the comparison more easily that way.

A more correct comparison would be Bitcoin: 1 Bitcoin will always equal 1 Bitcoin. There are no rarer or one of a kind Bitcoins that are more valuable. NFTs are unique assets that have been brought onto the blockchain, mostly drawings, digital art, music or videoclips.

Will NFTs still be around in 10 years?

There is a very high chance that NFTs will be around in 10 years, however, they will not have the same purpose until then. Fact is that many projects that are either NFTs themselves or involved with them continue to grow by the market cap. There are many forecasts by experts about the further increase. A market report published by Verified Market Research (VMR) suggests a market cap of 231 Billion USD by 2030. Another market report by SkyQuest Technology claims that the total market cap of NFTs could reach 122.42 Billion USD by 2028 (The report can be purchased at https://skyquestt.com/sample-request/non-fungible-token-NFT-market). Also, besides market reports and estimations, some of the biggest tech enterprises of the world are already working with the NFT technology, Facebook or Twitter for example. Facebook changed its name to „Meta“ last year since Mark Zuckerberg is betting heavily on the Metaverse. The company already tested NFT-features on Facebook & Instagram, too. The fact that such large companies are experimenting with this technology and investing in it actually answers the question of whether the technology will still play a role in 10 years already.

The many use cases for NFTs

Most people only know NFTs as „pictures on the internet“ which can be traded, but in reality NFTs are offering so much more. Here is a list of NFT use cases that are either already a thing or very well could be in 10 years:

Tickets & Passes: These could only exist on the Blockchain in the future as NFTs. The times of hard-/ and online tickets could be over by then.

Proof of achievement & skills: If you’ve mastered a class, skill or seminar, you could get your certification as an NFT.

Profile pictures: This is already a thing on Twitter, as the platform lets its users select a NFT for their profile picture. They have to own this NFT and proof it by connecting the wallet to Twitter. If you want to know how to do this, there is a guide by the official OpenSea page: https://support.opensea.io/hc/en-us/articles/4415562648851-How-do-I-set-my-NFT-as-my-Twitter-profile-picture-.

Voting records: There is a good chance that your vote will exist on the Blockchain in the future.

Domains & usernames: This is already a popular use case for NFTs. Just as you can buy domains on the regular internet, you can do the same on Ethereum or Solana. The domain also has multiple use cases and is always a one of one, since every name can only exist once.

Ownership of real estate: This works both in the real and digital world. You can buy a house and get the certificate as an NFT. You can also buy digital houses or land in the so-called metaverse. The metaverse has had its big hype last year and will probably play a big role in the future. Facebook CEO Mark Zuckerberg is, for example, very convinced of this future.

Music rights: This is also already common on the NFT market. Many musicians sell special NFTs that come with music rights.

Medical records: Medical records are mostly saved centralized. This could change when they are brought onto the Blockchain as NFTs.

In-Game assets: A very big use case for NFTs. There are many famous Blockchain online games like Axie Infinity which use NFTs for in-game assets. The business with microtransactions, weapons and skins is a multi-billion dollar business and will likely be taken over by NFTs in the future.

Degrees, Diplomas & Certificates: Chances are that students could get their Degrees, Diplomas & Certificates as NFTs in the future, too.

Digital Artwork: The most common use case for NFTs so far. NFTs usually are just digital art in form of pictures, videos or drawings.

…and many more

Should I sell my NFTs now or hold them?

It is not a secret that most NFTs get their value through hype alone, and that this hype dies off very quickly. If you are really passionate about the project and the NFTs you are holding are not much money for you, then you could hold onto them. If you have heavily over invested into them, you probably should get rid of them at the next good offer. There will be many new good opportunities in the coming years, NFTs are just getting started.