What are NFTs?
NFTs are digital art pieces stored on a blockchain, representing ownership of unique digital content, despite their complexities.
NFTs are non-fungible and indivisible, making them impossible to split or directly exchange one for another of equal value.
We can verify non-fungible tokens by tracing their ownership history back to their creator. Finally, digital collectibles are not interoperable.
An NFT on Ethereum blockchain in one video game is inaccessible in another due to differing features and platform restrictions.
NFTs: What is the Purpose of Owning Non-Fungible Tokens?
Are NFTs still a good investment?
Crypto collectibles are still a good investment in 2025, depending on the type of digital collection you would want to hold in your portfolio. Like fungible tokens, you should always consider risks and rewards.
As an crypto arts investing beginner, ask: Do potential rewards outweigh risks for a specific NFT?
Top digital collections like Axie Infinity, BAYC, CryptoPunks, NBA Top Shots, MAYC made early investors wealthy.
Early collectors saw massive gains quickly, but such golden opportunities may not repeat soon.
Crypto market’s mixed phases, with bullish and bearish trends, drive NFT success.
Thoroughly research NFT projects before investing your valuable funds.
Invest in new digital arts or buy established collections during market dips for long-term gains.
NFT Global Sales Volume Surpasses $70 Billion
The future of NFTs
A lot of sceptics may not see a future for crypto collectibles because of its bear market over the past two years. Unfortunately for those sceptics, NFTs have proven their viability and have numerous real-world applications beyond their imagination.
Association football (soccer), the National Football League (NFL), and the National Basketball Association (NBA) are some of the popular sports with huge sales volumes.
As time progresses, teams from various sports, including cricket, rugby, and racing, will also embrace NFTs. Once that happens, global NFT market sales could double or triple from their current state to around $80 billion or $120 billion in the next five years.
What is the Point of NFTs?
Non-fungible tokens were just pieces of computer-generated art when they started in 2014. As the years passed by, NFTs have created a new market for artists and artistes who can make revenue from their creations.
NFTs, which utilise blockchain technology and the internet, now enable millions of artists to access a global market that was previously available only to a select few with connections to popular art galleries around the world.
Take the Bored Ape Yacht Club and CryptoPunks NFTs as examples. With billions of dollars in revenue, these digital collectibles have taken over the market and are owned by collectors across the globe.
A few years ago, it was highly likely that only North Americans, Western Europeans, or Asians could have acquired these popular NFTs. Thanks to the possibilities of blockchain technology and smart contracts, millions of unknown artists have become an integral part of the art industry.
Aside from artists, artistes (those in the entertainment industry) can also use NFTs to sell their songs and make royalties.
Before YouTube, artists relied on mainstream media like TV to showcase their music to industry stakeholders.
YouTube enabled talent managers to discover and guide new artists toward professional entertainment careers.
NFTs allow independent artists to bypass intermediaries, connecting directly with fans for greater control.
Direct fan access lets artists earn royalties directly, avoiding reliance on percentages from intellectual property.
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Passive income
Additionally, NFTs have created passive income for gamers. During the pandemic, which led to numerous lockdowns across the globe, there was a surge in the demand for games. The resultant effect has been a spike in Play-to-Earn (P2E) games.
In P2E games like Axie Infinity, in-game items become tokenized digital collectibles, sellable as NFTs.
Many games adopt in-game tokenization, a key factor gamers consider before joining a platform.
As Web3 and Metaverse grow, new games will boost NFT sales volume alongside existing ones.
What industries use NFTs?
Several industries have tapped into NFTs because of their authenticity, ownership, and transferability. Some of the industries that use NFTs include gaming, fashion, art, the virtual world, real-world assets, and documentation sectors like real estate, sports, domain names, phygital (physical and digital goods), event tickets, metals, music, healthcare, and insurance.
Bitcoin NFT Sales Surpass Ronin, Now 3rd Largest Chain by All-Time Volume
Where are NFTs stored?
There are two ways to store NFTs. You can store NFTs using custodial accounts and non-custodial accounts. Centralised entities, such as some NFT marketplaces, hold custodial accounts.
Among NFT marketplaces, Nifty Gateway is a custodial platform. This means that you can set up an account with Nifty Gateway and store your NFTs on its platform. Using Nifty Gateway as custody for your NFTs only carries risk if hackers compromise the NFT platform. Hackers have a significant chance of stealing your digital collectibles if they manage to breach the NFT marketplace.
While such an arrangement may sound like a negative, custodial platforms take responsibility for their clients’ assets since they are centralised, and they will use the needed resources to help holders get their NFTs back.
An NFT marketplace such as OpenSea is not a custodial platform. What OpenSea does is allow you to buy digital collectibles and store your NFTs in the crypto wallet linked to your account. What this means is that you are solely liable for the protection of your wallet. Should a third party steal your NFTs, since OpenSea does not have any authority over your collectibles, there is nothing representatives of the NFT marketplace can do to help you recover your tokens.
Some of the best NFT wallets include but are not limited to ZenGo, MetaMask, Enjin, TrustWallet, AlphaWallet, MathWallet, Coinbase Wallet, Ledger Nano X, Crypto.com Wallet, Kukai Wallet, and XDEFI Wallet.
Do NFTs Rise in Value?
Yes, all NFTs rise in value. When Bored Ape Yacht Club was launched in April 2021, it exchanged hands for an average sale value of $213.39.
By the end of July 2021, BAYC’s average sale value was $13,096.92. After a rise in the number of unique buyers, the average sale value of Bored Ape NFTs rose significantly to $194,988.50 in December 2021. With an eye on the question, do NFTs rise in value, BAYC price rose by 91,276.6% in eight (8) months.
When CryptoSlam began tracking the sales of CryptoPunk NFTs in September 2020, it had an average sale value of $352.91.
By the end of December 2021, CryptoPunk NFTs’ average sale value was $198,976.33. Within four months, the average sale value of CryptoPunk NFTs increased by 56,281.6%.
The Sandbox NFTs had a relatively smaller price of $213.32 in February 2021 and rose to an average sale value of $10,107.13 in November 2021. In just seven (7) months, The Sandbox NFT was up by 4,638.01%.
From the above metrics, you can see that crypto collectibles can appreciate over time.
Can digital collectibles be stolen?
Yes, digital arts can be stolen because they are still pieces of art that are housed inside a blockchain instead of an art gallery.
Thieves can steal Bored Apes, CryptoPunks, World of Women, and Top Shot NFTs, just as they snatch Mona Lisa, Water Lilies, or Old Guitarist from secure galleries.
While physical art has been stolen through years of planning by criminals who may have had an insight into the layout of a particular gallery, digital art is stolen by criminals called hackers who have spent time studying the flaws of blockchain technology and crypto wallets.
A wonderful example of how NFTs can be stolen is the hacking of the Instagram and Discord channels of the Bored Ape Yacht Club in April 2022. Instagram is a social media platform used to market and inform stakeholders about the future of a project.
Discord, like Telegram, is a social media platform for managing crypto project communities, such as Bored Ape.
The Bored Ape project sent a “mint” link to its followers, leading to the creation of Otherdeed NFTs for Otherside Metaverse.
According to the official BAYC Twitter account, the link assured users that they could mint “land” in the Otherside Metaverse, which was not true. Users with compromised crypto wallets lost 24 Bored Apes and 30 Mutant Apes as a result of this scenario. The combined value of the 54 apes’ NFTs was $13.7 million.
Moonbirds project
Another example of NFTs that can be stolen is related to the Moonbirds project. Within a short period after launch, Moonbirds NFTs became one of the digital collectibles many collectors considered adding to their NFT portfolios. In May 2022, NFT owners were reminded about the need to have the right necessary security encryptions when 29 Moonbirds were stolen using the same malicious link Bored Ape holders fell victim to a month before. The worth of the stolen Moonbirds NFTs was around $1.5 million.
Stolen NFTs
Other instances of stolen NFTs occurred in July 2022 when NFT finance platform Omni saw $1.43 million worth of NFTs stolen, while the compromising of a Discord channel led to the stealing of $1.8 million worth of Alethea AI in March 2022.
Farmers World, a WAX blockchain crypto game, lost $15.7 million in stolen in-game NFTs in November 2021.
The issue of stolen NFTs is why OpenSea, the biggest NFT marketplace, launched new features to freeze malicious links and stolen NFTs in November.
OpenSea freezes links and collectibles to review transactions, aiming to prevent scams and thefts with thorough checks.
Sellers will be notified of a potential sale of one of their crypto collectibles that OpenSea deems suspicious.
Sellers get a 7-day grace period to dispute or confirm NFT transactions before sales to new owners.
OpenSea’s measure aims to reduce stolen digital arts sales through malicious programs promising fake airdrops.
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Where are digital arts traded?
NFTs are traded on what are called NFT marketplaces. To understand this, let us examine cryptocurrencies, stocks, commodities, and metals.
Cryptocurrencies trade on exchanges like Coinbase, Binance, JPEX, KuCoin, Uniswap, PancakeSwap, Kraken, SushiSwap, both centralized and decentralized.
Exchanges offer markets for crypto-to-crypto (BTC/ETH, ETH/ADA), crypto-to-fiat (BTC/USD, ETH/GBP), and crypto-to-stablecoin (BTC/USDT, ETH/USDC) trading pairs.
Stocks such as Apple Inc. (AAPL), Microsoft Corporation (MSFT), Amazon.com, Inc. (AMZN), eBay Inc. (EBAY), Tesla Inc. (TSLA), and Ford Motor Company (F) are traded on the New York Stock Exchange (NYSE) and NASDAQ.
Investors trade stocks on prominent exchanges like the Shanghai Stock Exchange (SSE), Euronext, and the London Stock Exchange (LSE).
Commodities and metals like natural gas, coffee, oil, and gold can be traded on trading platforms and applications such as eToro, Plus500, City Index, AvaTrade, and Capital.com.
Platforms designed for digital collectibles facilitate the trading of digital arts, commodities, stocks, and cryptocurrencies.
Top NFT marketplaces include OpenSea, Rarible, NBA Top Shot, Binance NFT, Nifty Gateway, SuperRare, Foundation, X2Y2, Zora, Known Origin.
Some platforms focus on digital art trading, while others cater to emerging areas like music NFTs.
Some of the best music digital art marketplaces are Cocky, Mintable, Async Music, Blockparty, Zora, and Catalog.
