It Turns Out That This Is The Reason Why NFT Prices Are Expensive!

Non-Fungible Token (NFT) is one of the most popular digital assets today. However, the assumption that NFT is an expensive item has also emerged along with its popularity. One of the things that shocked the public was the NFT named “Testing Testing 123 #1” which was handwritten by the CEO of FTX, Sam Bankman-Fried, which was valued at Rp. 3.9 billion. So, what actually causes the high price of NFT?

Cause NFT is expensive

• Nft Artwork Considered Expensive Due to Process

This NFT can take various forms, such as images, gifs, videos, music, or even game assets. Speaking of works of art, to produce a work of course takes a long time.

Simply put, the process involved in making a work starting from finding ideas, finding ideas, pouring those ideas into sketches to presenting them into works can take a long time. Not a few works of art are produced within months to years. This long process is what makes NFTs or crypto artworks expensive.

• Originality

These NFT assets run on the same blockchain network as other crypto assets. Thus, NFTs that have been encrypted on this blockchain cannot be duplicated so that their authenticity can be guaranteed.

Let’s take an example as mentioned at the beginning of this article, Sam Bankman-Fried’s NFT which has a fantastic price of Rp. 3.9 billion. When an item is sold as an NFT, it will have a unique code number that cannot be duplicated by any party. And one thing is for sure, the NFT is different from other NFT assets.

Non-Fungible Token standardization and detailed attributes of smart contracts make each token uniquely identifiable and authentic. Users know that there is only one of each token in existence, so they cannot be duplicated or copied and there is also no possibility of fraud.

The transparency of blockchain technology will also make it possible to verify and prove authenticity. Counterfeiting and fraud as we know it is a big problem for many of the art or luxury goods industries. Well, with Blockchain that will empower Non-Fungible Tokens, this can be prevented.

• Quality

To produce works of good quality, of course, the process required is not easy and takes a long time. For this reason, the more crypto or NFT artwork has value, the more expensive the price will be.

• Artist Popularity

The popularity of the artist is also a contributor to why the price of NFT can be expensive. NFTs made by people who have influence and credibility, and also have popularity indirectly make the price of their NFTs expensive.

This can be proven by the most expensive NFT ever sold is Everyday: The First 5000 Days by renowned digital artist Mike “Beeple” Winkelmann. The NFT was sold for $69.3 million or equivalent to Rp. 1.009 trillion. This NFT was purchased by Vignesh “Metakovan” Sundaresan at Christie’s art auction house.

Conclusion

The assumption that NFT is an expensive item is not without reason. We can assume that the reason for this expensive NFT is that it is comparable to the emotional value obtained when we successfully collect a work of art that we desire, moreover, this can also be done at the same time as an investment.