When NFTs became famous around 2021, people were losing their minds about how investors were buying digital land or trading what seemed to be regular images for exorbitant prices.
But now, seeing how artists are incredibly successful with creating and selling NFTs, the world takes these assets more seriously. Some creators continuously worked on their projects and leveraged the powers of NFTs to sell them at considerable value, such as Beeple, whose collage was priced at US$69 million at an online auction.
Of course, there are more implications for the making of NFTs. First, most of them are built on the Ethereum blockchain, known for a multitude of tools and applications that help developers and artists but also increase transaction fees.
For example, if you buy Ethereum with a credit card or debit card to charge your digital wallet to pay for what’s needed on the blockchain, you may observe how fees are sometimes the subject of volatility and therefore affect the income of a creator.
The need for creators to be paid better continues as the market surges, but one solution has been discovered by the project Infinity Checks.
What is Infinity Checks about?
Infinity Checks is an unlimited collection of NFTs that all cost 0.008 eth each. While this price seems unbelievable, the team thought of maintaining the price equilibrium through the deposit held in the smart contract that supports the collection. If the collector wants a refund, the money can be withdrawn, and the NFT is destroyed.
This whole system is intended for the NFT ecosystem to gain value but not to prioritize monetary value right away. Such an approach wants to create a community of artists and investors where art is really appreciated and valued at the right price. At the same time, the project team wants to prove that decentralized companies don’t need to charge considerable fees for investors to participate in projects.
Is this a real solution to the supply-demand imbalance of NFTs?
The lack of equity between the prices of NFTs and the increasing number of their frequency can lead to certain disparities in the market. While it’s true that this ecosystem is near to regular ones, and sometimes we can’t apply the same economic concepts to it, we can’t help but argue about the sustainability of this system for the long term.
In other words, it’s all about the enthusiasm of potential buyers, traders and sellers. We all remember how well the Bored Ape Yacht Club was received in 2021 and their high prices. With time, costs go up and down, depending on how much people remember about the collection.
Now the price stabilized, but these NFTs will always be renowned for their popularity.
It may be true that enthusiasm passes, but the rename of a digital asset stays for a long time, so even if its price is affected by volatility, it will be surrounded by investors looking for something more stable. Bitcoin, for example, is the first cryptocurrency and, therefore, the most used, considering its name on the market. Bitcoin prices surged and fell so many times and in so many unpleasant ways that there were many alternatives to stablecoins for it. However, despite its journey, Bitcoin is still the most preferred among investors.
Will NFTs be valuable forever?
It’s true that NFTs are only a niche in the crypto market and might not be that relevant to all investors. They seem unimportant for governments, although NFTs were used for fundraising, domain name ownership and finance. NFT regulation might not happen too soon, as institutions are busy adopting Bitcoin and regulating other digital assets and applications.
However, NFTs are the most important for an essential economic sector, art. Digital creators turned to NFTs and the blockchain ecosystem to appeal to another target audience and therefore bring more money into circulation by selling their crafts at the market price. Of course, volatility is not their fault, so if an NFT is now worth millions and only a few dollars tomorrow, this will only impact the creator.
At the moment, we can’t say how long these assets will be valued, regardless of the price, because even if creators continue leveraging their features, the demand might simply not be there because many other types of assets appear continuously. At the same time, there’s uncertainty about the crypto sector as well, considering how many countries are skeptical about their use and importance.
What are some other use cases of NFTs?
NFTs are not only fun and games but can be used for the benefit of numerous real-life industries. That’s because these digital assets have something unique about them, which is authenticity. NFTs help establish ownership by ensuring a certificate of authenticity to the one who’s the current owner. This way, NFTs can also be traced, making them accessible and able to provide new revenue streams.
These features make NFTs the perfect tools for the following industries:
- Certification and documentation, where NFTs can tokenize documents, from academic certificates and licenses to medical records;
- Healthcare and medicine, where information could be stored more efficiently, and patients would have access to data;
- Real estate can also be improved with the help of NFTs because they can provide an easy way to check titles and ownership history;
- Finance is a sector that would benefit the most from NFTs, especially in DeFi, where leans could be obtained easily, for example;
- Supply chain and logistics are industries whose NFT involvement would add more immutability and transparency to maintain the data authentic;
Final considerations
The NFT sector is complex but beneficial for most digital artists. Unfortunately, the disparities between prices and their creation, as well as volatility involvements, might create even more difficulties for creators considering these assets are not regulated.
At the same time, being all built with the help of the Ethereum blockchain, many obstacles can interfere with their creation process. Therefore, a project called Infinity Checks developed a unique system to help artists.