Introduction

The past year has seen NFTs become a huge hit with the Web3 community, and some record-breaking sales have grabbed the attention of mainstream media.

But, what are NFT’s and why are they selling for millions of dollars? We’ll give you a brief explanation of NFTs, their use case, and why they could be a huge hit in the real estate industry.

What are NFT’s

NFT stands for Non-Fungible Token. NFTs are issued on a blockchain; the ‘non-fungible’ part means that they’re completely unique, and there’s no other collection of data like it. Cryptocurrency itself is fungible, meaning that they’re interchangeable with each other.

NFTs became popular as pieces of digital art, the idea being that because they’re unique, they can provide a receipt of authenticity stored on the blockchain. Even in the real world, having the original piece of art is a huge deal, but it’s a lot harder to verify.

If you have digital artwork, this can easily be verified and passed on to the next owner once sold, securing authenticity via the blockchain record.

Ways NFT’s Are Used

Like we mentioned before, NFTs are a huge thing right now in the Web3 community; brands like Nike, Rolex, Adidas, and many more are coming up with their own way to hop on board the hype train. But why are they so popular?

Collectibles

Collecting items isn’t unique to NFTs; we’ve all collected something in our life, whether that be stamps, baseball cards, soccer cards. We’ve all enjoyed the idea of owning more of something than someone else interested in the same thing.

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The same goes for NFTs; a lot of people collect NFTs because they just enjoy the artwork. This can be in the form of game characters or in-game items like armor, weaponry, etc.

Music and digital artwork are both huge areas that interest collectors; as NFTs, they’re more easily traded for a profit. Video NFTs could come in the form of historic moments in TV history, such as sporting events.

The collectible aspect of owning these NFTs is understandable because people can appreciate art without needing to do anything or have a utility. Does the Mona Lisa do anything other than collect dust? No. It’s simply an appreciation of the artwork that gives it its value and, for some people, bragging rights. It’s no different with NFTs.

The highest selling NFT was sold for $91.8 million, called Merge, and its owned by 28,983 people as they all own individual pieces of the artwork.

Metaverse Items

The Metaverse has also become popular over the past six months as the crypto markets were booming.

Popular virtual worlds such as Sandbox and Decentraland, along with Facebook bursting their way into the metaverse scene, had propelled virtual worlds onto the world stage, popularity soared, and so did the valuation of NFT projects that promised in-world items to flex on their companions.

A great example of this would be RTKFT (pronounced artifact). An NFT clothing studio that was recently acquired by Nike.

And not only that, but digital real estate became incredibly popular too; a plot of land on the Sandbox virtual world sold for a record-breaking $4.3 million.

Money Makers

The most obvious reason for owning an NFT is for profit. Take a look at this list of the most expensive NFTs ever sold.

You can buy and sell NFTs like baseball cards, and if you’ve got something unique, they can sell for millions of dollars.

But, guessing what’s going to be popular isn’t the best strategy; this method has lost plenty of folks a lot of money. The most important thing to ask yourself when buying NFTs is, “Do I think this NFT is cool.”

And if the answer is yes, then a lot of other people probably will too, and if they don’t think it’s cool enough to buy, then you’ve still got your NFT to enjoy.