Can You Become a Millionaire With NFTs?
Non-fungible tokens (NFTs) are all the rage these days. If you’re an NFT enthusiast, then you probably already know how incredible it feels to acquire an incredibly rare digital collectible or game item through crypto trading, then use it to win something in another game or sell it on the market for a massive profit. But if you’re just hearing about NFTs now, you might be wondering if this investment vehicle could ever become as profitable as traditional investments like stocks and bonds. Are NFTs worth all the hype? Are they as stable as conventional investments?
Top performing non-fungible tokens (NFTs)
Analyzing real-world investment data for cryptogames can tell us something about what works and what doesn’t. So, let’s dive into cryptoeconomics to see which cryptogames have been making money. The most expensive non-fungible token in CryptoKitties, DragonChain’s Baby Celestial Dragon , sold at auction on September 7th 2018 for 4.3 ETH, or approximately $4000 USD at time of sale (approximately $3400 today). Even accounting for price fluctuations, it is likely that more than 1000 people invested at least 0.1 ETH in buying one dragon. Another popular cryptogame is CryptoCelebrities which has generated nearly 200 Ether (~$120,000) so far since its launch earlier in 2018.
Three tips on how to invest in Non-Fungible Tokens (NFTs)
1. There are certain risks associated with investing in digital assets, so investors should always do their own research and conduct thorough due diligence before committing capital to any new cryptocurrency.
2. Invest only what you’re willing to lose!
3. Diversify your portfolio: The best way to invest in new cryptocurrencies is by diversifying your portfolio and maintaining flexibility as markets change (which they will).
How the market will develop
What can we expect from non-fungible tokens as they become more popular and valuable? While it’s too early to say for sure, there are certainly indicators that prove that investing in these digital collectibles could be lucrative. Some projects are already starting to see mainstream adoption: In 2018, CryptoKitties became so popular that people were spending $100 million on virtual cats every month. As NFTs continue to attract investors and break into markets outside of gaming, there’s reason to believe that demand will increase even further. The market may or may not slow down after its initial boom period, but any type of asset whose value increases with public interest is an investment worth paying attention to. And if you’re looking to invest in something long-term, NFTs might just be your best bet.
Crypto Collectibles are like baseball cards with an extra layer of value
they’re unique and they can also be used as cryptocurrency. These digital goods are simple on-chain representations of more complex cryptographic tokens, which is what gives them their value. Crypto collectibles don’t need to be a part of an existing game—in fact, most of them aren’t; they can exist outside that context—but it does make them more engaging for users. One such example is CryptoKitties, whose popularity exploded in December 2017, quickly gaining popularity for its off-the-wall premise: users could buy and sell virtual cats through smart contracts using Ethereum. The game didn’t really change anything about blockchain technology or smart contracts—it was just fun enough to draw attention away from other applications using those same tools.
And finally, don’t compare crypto collectibles to cryptokitties
Just as you wouldn’t compare CryptoKitties to bitcoin, don’t try to compare your project to others. The whole point of crypto collectibles is that they enable new forms of value creation—not just from digital cats but also from derivatives, gambling, prediction markets and asset-backed tokens. Before you write anything, think through how your project makes sense in relation to all other crypto assets. And remember that it may be too early to tell which projects will succeed: Today’s overvalued investment could turn out to be tomorrow’s breakthrough use case.