If you wander in crypto groups and communities, you might witness the keyword “NFTs” highlighted almost every second. Why are people in discussion of a trending NFT at the moment? Why did the Bored Ape Yacht Club NFT collection exceed the 100 ETH floor price? Why are Crypto Punks NFTs insanely bought by Justin Bieber or Jay Z? We bet that most of you have not found answers to one of those questions above. Those are just a few questions that illustrate people’s curiosity about the NFTs’ heat. The answer is simple, it’s because of the intrinsic value each NFT holds. The following article can help you. This is a more thorough explanation of how and why NFTs have value, in other words, to give an answer to the question: “What is the value of an nft?”<img src="https://cdn.builder.news/news/11ecd5b458eb7450a8e6023f659fee92.jpg" alt="Value of NFTs" title="Intrinsic value of NFT" width="600" height="338" class="lykafe0"><h2>NFTs in the old-world versus in this day and age</h2>NFTs are not too unfamiliar for you to have not heard of them once. Most crypto enthusiasts understand NFTs or Non-fungible tokens are basically a kind of digital assets that are made in limited quantities and fully supported by Blockchain technology. In more simple terms, NFTs represent real-world objects like art, music, in-game items, and videos but can be bought, sold, and stored virtually after transactions in cryptocurrencies instead of fiat money. You might be overwhelmingly surprised to know that NFTs have existed and been generated for thousands of years ever since people began to have ownership demands. And NFTs can be utilized in various aspects of life. A certificate of land use right is a form of NFT in real life. A landlord only needs a paper to prove he has all rights on the land from building a house to offering a service. Moreover, an owner of real estate means not only a stable life but also a huge profit will be derived from it. After a certain amount of time, as the population grew, the demand for land skyrocketed aggressively which resulted in exorbitantly high prices when a person wanted to have one or two.Now, people are talking about NFTs like Crypto Punks on OpenSea, Everydays – The First 5000 Day artwork, Axie Infinity’s exclusive NFTs… As such, NFTs seems to be a novel yet old definition. Over time, when the finance market is rapidly introduced to a decentralized world, NFTs don’t hesitate to integrate themselves into every corner of modern life. Not only attached to physical assets like real estate, but NFTs also have the ability to generate profits as they are designed.<img src="https://cdn.builder.news/news/11ecd5b458eb8dd6a8e6023f659fee92.jpg" alt="value of NFT- Cryptopunk" title="Cryptopunk on OpenSea" width="600" height="362" class="lykafe1"> More and more NFT offerings are coming with physical assets — for instance, a physical work of art in addition to the digital piece of art, or membership, like the Bored Ape Yacht Club, to a club for people who are holding the same type of NFT.<h2>Decode the intrinsic value of NFTs</h2>The intrinsic value of NFTs will be evaluated based on how beneficial it is to holders’ lives. To a certain group of holders, the value they define will be different from that of others. Some find a sense of authenticity after owning an NFT while others appreciate the potential financial growth of that. In certain cultural contexts, people are inclined to prove their ownership so strongly that they can pay a huge amount of money just to possess a tiny item worth millions of dollars like a British Guiana One Cent Magenta stamp. The same situation will happen to own NFTs where they can find for themselves an intrinsic value of what they have in mind. There are 2 common answers to how NFTs are valued by most crypto enthusiasts: rarity and usefulness.<h3>Value of NFT: Scarcity</h3>The intrinsic value of NFTs will either increase or decrease based on their scarcity and that of different NFT collections will vary accordingly. Literally, an NFT that can be hardly found in the second edition might be more precious than those with hundreds of replications. The limited NFT items must obtain a lot more attractions from users which resulted in the incredibly increasing price. Why do people want to own a rare NFT? Owning NFTs or having blockchain proof of ownership will give them a great sense of distinction and conversely have effects on the premium value of NFTs.<img src="https://cdn.builder.news/news/11ecd5b458eb923fa8e6023f659fee92.jpg" alt="What is the value of NFT" title="Creating NFT" width="600" height="338" class="lykafe2"> You can find the intrinsic value of Crypto Punk NFTs from their scarcity. There are 10,000 Crypto Punk characters that are said to be unique and no two are alike. Moreover, the rare levels for each Crypto Punk NFT will be further elevated based on a combination of various attributes. The more rare attributes that NFT has, the more scarce an NFT is. If Hermes Birkin - a Hermes special bag edition, is only available for a limited quantity in a year, owning a Crypto Punk means no one else can have what you’ve got. If you want to prove you have the authentic version that is Hermes housemade, you will have to have bills, date stamps, and maker marks. It’s not in the same spot with NFTs or Crypto Punks particularly. The intrinsic value of NFTs lies in their scarcity and authenticity where you are proved to officially own the asset on the blockchain ecosystem. <h3>Value of NFT: Utility</h3>People might question themselves - What gives an NFT value? Another factor that can determine the intrinsic value of NFTs is their utilities. How the NFTs can be used or converted to beneficial assets also reflects the financial value they hold. The utility of an NFT will be varied based on different types of NFTs.On the market, there are some well-developed genres of NFTs like art NFTs, in-game NFTs, collectibles NFTs, and more new types are being incubated.<img src="https://cdn.builder.news/news/11ecd5b458eb99c2a8e6023f659fee92.jpg" alt="why does nft have value" title="Utility is one of values of NFT" width="600" height="338" class="lykafe3"> In-game NFTs are most well-known for their utilities in the game itself and real-life profit. In some games like World of Freight (WOF) and Axie Infinity, … exclusive tokens will be generated from NFTs found in each and every completed mission or task. The tokens can be used for customizing, upgrading, and purchasing new items, companions, and characters that help gamers reach higher and higher ranks on the leaderboard. This spectacular characteristic of NFTs provides them with a cumulative value over time. To game enthusiasts, they don’t even need to think twice before paying thousands of dollars just to own a rare and hot item in that game. <h3>Value of NFT: Supportive community</h3>A hectic community is what determines the value of an nft, to be the last. In context new NFT collectibles that can’t stop mushrooming in the marketplace, there are some that don't have either groundbreaking technology or high-level of utility yet still receive huge attention from users, particularly memes that are sold as NFTs. Technology might not be the most dominant factor when it comes to NFTs. The underlying power of this phenomenon is from its supportive community. The bigger the group of holders of NFT is, the more sustainable value the asset holds. The Bored Apes NFT collection is a representative example. The Bored Ape Yacht Club has almost 10,000 members which is not too impressive when being compared to other NFT communities, yet serious holders always find the best methods for increasing the value of their assets. This, hence, resulted in the long-lasting value for the NFT itself.<img src="https://cdn.builder.news/news/11ecd5b458eb9e73a8e6023f659fee92.jpg" alt="what gives an nft value" title="What gives an NFT value" width="600" height="360" class="lykafe4">Also, game communities will be both created as an ecosystem for players to compete with other people and be a space for exchanging high-level or rare items. The community is also building a real-world supply chain blockchain from which intrinsic value NFTs are derived.Although some NFTs are just collectibles that satisfy the owner's sense of distinction, they still have their own “utility” to them. Not even mention of NFTs is being sought by influencers and KOLs around the globe which excessively contributes to the explosive growing number of NFTs debuts in the market. NFTs provide a democratic economic playing field to their participants. This new creator economy allows artists to monetize their passion, and investors to invest in the future they believe in. This is the right time for everyone to understand and begin owning an NFT.However, which NFTs to invest in are on top of your mind right now? Let’s find answers in our next article on <a href="https://builder.news/" alt="Builder.news" title="Builder.news" target="_blank" rel="" class="">Builder.news</a>.

There are factors reflect values of NFTs that you might not know!

Decode the intrinsic values of NFTs