NFT Token Lists: Ways to Determine Their Real Worth

*All of the following is for informational purposes, not financial advice.

The non-fungible token (NFT) industry is still in its infancy, so there is no agreed-upon way to value NFTs. No one should pay thousands of dollars for a digital item that will be valued at ten dollars a short while later. This article will list a few methods that industry experts have proposed to determine the actual worth of an NFT.

An NFT’s real worth can be determined by analyzing price history, purpose, community attention, the creator, comparing similar NFTs, and determining utility.

What Are NFTs?

NFTs are unique and non-divisible tokens. They can’t be replaced by anything else. They can be used inside a game and can represent real-world assets. NFTs can be art, land, game items such as cars and weapons, music, and even videos.

Can cryptocurrency be an NFT? No, cryptocurrency can’t be an NFT because it isn’t unique and can be replaced by other coins. If you trade one Ethereum for another Ethereum, you will still have the same coin.

What Are the Benefits of Having an NFT?

NFTs are easy to track, and they can be transferred between users. NFTs are unique, and they cannot be replaced by anything else. It is much easier to sell an item if it has a unique ID that can’t be changed. The uniqueness of the asset can also make it valuable. NFTs will also be usable in multiple games and can be easily transferred on the same blockchain.

What Are the Problems With NFTs?

NFTs are easy to lose. They can also be hacked and stolen from your wallet. If you lose access to your cryptocurrency assets, there is no way that you can get them back. It’s highly recommended to store your NFTs in a hardware wallet. NFTs are also not as liquid and easy to trade as other cryptocurrencies. Many exchanges do not yet support them.

How Do You Determine the Real Worth of an NFT?

NFTs are not yet a mature market. There are no real price standards in place yet, so the real worth of a particular NFT is not always easy to determine. Several methods can be used to help determine what the NFT is worth.

Look at the price history. If the token has been traded on a third-party exchange, you can track its price over time.
Look at how much attention it is getting from the community. If the NFT is being talked about or used frequently, its value will likely increase. You can also check social media for news about the NFT. It may be worth less than you think if it hasn’t received many mentions.
Look at the item itself. What is it? What are the items being used for? How unique is it? How desirable is it? The rarer and more unique the item, the higher its value. Its value will be limited if it is only used within a game or decentralized application. It will have a higher value if it can also be used in real-world applications.
Look at the creator and their reputation. Are they well-known, experienced, or respected in the community? Do they have other similar works that have sold, and if so, for how much? If they are highly regarded, their token will probably increase in value. If you are unsure about them, check for their presence on social media. Do they promote their works, and do they have a large following?
Compare to similar NFTs. Look at their similarities and differences. This will help you decide on its value.
Consider the utility of the NFT. What is the utility of this token? Does it have a platform that you can participate in? Is there a way to use the tokens for something other than collecting?

Examples of Highly Valued NFTs

Art: Everydays: the First 5000 Days – sold for $69.3 million. Renowned digital artist Beeple created the NFT. It is a collection of 5000 individual pieces of digital art all in one collage. In 2007 Beeple pledged to make one piece of digital art every day, and Everydays is a collection of the first 5000 days.

In-Game Item: The Axie named Angel from Axie Infinity – sold for $1.1 million. Axie Infinity is one of the best play-to-earn games but requires a relatively high financial investment to play.

Real Estate: A parcel of virtual land from The Sandbox, a virtual world – purchased for $4.3 million. The land was acquired by a group of developers named “Republic Realm” from the video game company Atari.

Music: An unreleased track from deceased singer Whitney Houston – sold for $999 thousand. Houston’s NFT is being sold by OneOf, a music NFT platform backed by Quincy Jones.

Trading Card: LeBron James Kobe Tribute Dunk from NBA Top Shot – sold for $210 thousand. Only 59 of these cards were sold, and only a few collectors have all of them.

How Can You Purchase NFTs?

To purchase an NFT, you’ll need to set up a wallet that supports the storage of the asset. Once you have a wallet, you can find platforms that offer NFTs for sale. When you find an NFT you’d like to purchase, you’ll need to send the appropriate amount of cryptocurrency to the seller’s address. The transaction will then be recorded on the blockchain.

Conclusion

There are many things to look for when determining the real worth of an NFT token. By doing your research and understanding the market, you will better understand the NFTs real value. You should now be able to more confidently invest in NFTs and reap the rewards of this exciting new technology.

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