Is NFT a scam or another big thing? The largest deal was made on December 4, 2021, when an anonymous digital creator PAK sold NFT Artwork 'The Merge' for $91.8M, and trading volume crossed $23B in 2021. Nobody knows for sure what the future holds, but there are signals we can observe right now.
In the digital world, everything can be copied, replicated, and distributed at no cost. NFTs are here to fix that and add real-world traits to digital assets—establishing provenance and ownership in a space where none existed before.
Value of an NFT = Utility + Ownership History + Future Value + Liquidity Premium. Currently, utility is limited and liquidity premium is secondary. The market is driven largely by Ownership History (as a historical asset) and Future Value speculation.
The NFT market has great potential in bringing value via utility and as a historical asset. But any market must have reliable infrastructure—something guaranteeing an asset will not vanish, ensuring uniqueness, and allowing legal ownership. NFT markets reside on global trust, much like the multi-billion art market.
The price of something is defined by the agreement found by a seller and buyer. The most influential factors are market demand, the author's prestige, the history behind the asset, and its popularity. A well-known painter whose artworks sell for $10k could mean an NFT of their work carries similar value.
