Why are NFTs valuable?

Follow us on Google News:
 Why are NFTs valuable?
Image source: Pixabay.com


  • Digital arts of Beeple, CryptoPunk, and even first tweet of Jack Dorsey have sold for millions
  • These are all NFTs – meaning their record of sale is stored in blockchain
  • NFTs come with the same ‘overvalued’ issues that ail the broader cryptocurrency world

Non-fungible tokens or NFTs are a big market today. Not only are Beeple and CryptoPunk digital arts selling for millions of dollars each, blockchain game tokens with NFT underpinnings are also in demand over the past some months.

NFTs biggest USP – blockchain

Blockchain-based digital currencies have initiated a financial evolution that sometimes seems to be challenging the hegemony of central banks and fiat currencies around the world.

The concept of decentralized money has grabbed the attention of retail investors, leading to a massive inflow of funds in cryptos. Influenced by the idea of quick gains, which is often deemed a characteristic of cryptocurrencies, investors pay little heed to these assets’ hyper-volatile nature.

Also read: The top crypto gainers of 2021, and a couple of underperformers

The underlying purpose of cryptocurrencies is to revolutionize the global payments system. NFTs came up as digital collectibles with the record of ownership stored in blockchain, in most cases Ethereum. It was a great draw for enthusiasts that were looking for alternatives to crypto assets (which are fungible).

Expensive NFTs sold in 2021

Problem with NFTs

The only problem with the NFT market is that many participants are just falling for the 'blockchain-based proof of ownership' narrative.

Can this one element – recording of sale on decentralized ledger – be enough to make anything and everything worth millions of dollars? The point is are we considering this ownership record more valuable than the underlying art itself? By this measure, Leonardo da Vinci's most famous paintings can have a lesser value than any random digital art just because the record of ownership of the latter is on blockchain.

Long-term sustainability of anything relies on fundamentals.

Also read: Top cryptos by market cap that ruled in 2021

Not every digital art selling as an NFT is overrated, for example, maybe someone saw value in Beeple's artwork and shelled out millions. But at the same time, the reckless launch of anything and everything as NFT is what ails the space. For now, the craze for blockchain, fueled by cryptos like Bitcoin and Dogecoin, is what has made every NFT such a hot deal. With the passage of time, dust might settle.

Bottom line

NFTs must be seen as a representation of the underlying artwork. If that digital asset is really unique, like physical artworks of some famous painters, the NFT’s high valuation is justifiable.


The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.

Featured Articles

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK