Many factors that contribute towards the perceived value of an NFT.
As we spend more time online – and our digital identity becomes more important – digital products and experiences have become more desirable. As NFTs provide provable digital ownership, they help add real value to digital assets.
There are three main factors that contribute to the value of an NFT:
- Scarcity
- Utility
- Community sentiment
As NFTs allow for digital proof of ownership, and as an NFT creator can decide how many are created, NFTs have introduced the concept of digital scarcity. If a sought-after NFT is very rare, its value will increase.
NFT utility is an important factor in determining its value. What does the NFT provide access to? What benefits does the holder receive? Are these perks valued by others?
Community sentiment is a strong factor in an NFTs’ price. What is the perceived potential of the NFT? Are the creators trusted? What utility will the NFT have in future?