We could compare why NFTs are valuable with how Pokemon cards are priced. Pokemon cards are also a finite asset; only so many pokemon cards have ever been printed and will ever exist. The rarest Pokemon cards that are kept in good condition can reach high prices over time.
Pokemon cards earn value over time because as time goes on, fewer Pokemon cards are kept in good condition. This is happening while, at the same time, more avid Pokemon card collectors exist out there. This could create a condition for Pokemon cards to earn value: more dollars are chasing a supply that is slowly depleting. Since there is more demand for the cards than supply, the value of the Pokemon cards goes up. The same principle remains true for NFTs.
Since an NFT is a limited digital asset that can only be stored in one wallet at a time, if many people are interested in the same NFT, this may cause a shock between supply and demand, causing the NFT to rise in value and therefore be worth more. And that is how an NFT could increase value!
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As the NFT industry is new, be sure to watch out for clear NFT scams that exist out there. Many scams and techniques exist to lure people into buying a certain NFT, even though the creators know that the NFT is worth nothing. Anyone can make an NFT collection, and anyone can buy NFTs. A common problem is the “wash sale” technique, where someone creates an NFT collection and buys the NFTs from himself, faking the value of the NFT collection. The blockchain will say that the NFT was sold for a certain price, giving it a specific value. This may lure people into thinking that the collection is expensive and therefore be willing to pay more than the NFT is worth thinking that they got a good deal.
Now, these people may have trouble selling their NFT for more value.
Overall, an NFT can only earn value if more people gain interest in it. Honestly, any NFT’s value is entirely subjective when we genuinely think about it. Like art, each NFT is worth the amount the buyer is willing to pay. Some people may think that an NFT is worth three times less, but as long as some buyer is willing to pay more for the NFT, then that is the true current value of the NFT.
Overall, just like art, most NFTs cannot earn value and may not even be able to retain their current value. Many scam NFT projects exist out there, so be careful. Realistically, only NFT projects with great amounts of backing and support might earn value. These NFT projects are generally well-known, already trading at high prices (like Cryptopunks and the Bored Apes), and so far have earned value. Nobody knows if these NFTs will retain their value over time or continue to earn more value over time.