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4 Ways NFTs Can Make You Money

Published on January 31st, 2022 | Updated on January 31st, 2022 | By FanFest

A lot of wealth was created in the cryptocurrency world, but not all wealth is built equally. There are many wealth implications to be considered when people invest in cryptocurrencies. Not only do they affect wealth accumulation but also wealth distribution.

1)  NFT encourages wealth by making it easier to own multiple items

One of the reasons why owning tokenized assets might make it easier to accumulate wealth is because you can own many more items than were economic feasible before digitization. Before companies like CryptoKitties, tokens for digital assets have been few and far between. If someone wants a pizza, then there are very few ways that one can prove ownership of that slice without actually being present with it during the transaction (and even if you are present with the physical item, there is no way to guarantee that you won’t lose it).

Now that digital items on the blockchain are becoming more accessible and attainable, wealth accumulation becomes more feasible. This makes wealth distribution fairer because wealth can be distributed beyond just those who have the funds for high value assets but also those with affluent lifestyles.

2)  NFT encourages wealth by increasing liquidity of crypto assets

Another wealth implication of NFTs is their ability to increase liquidity in cryptocurrency markets. According to classic finance theory, transactions should take place at near instant speeds if market participants choose different currencies or financing options (when they aren’t using cash). Since Blockchain technology facilitates this type of trade, many hoped that these types of trades would become more popular.

However, the reality is that they are far too slow for liquidity providers to be able to keep up with the market. The transactions are simply not quick enough for them to take advantage of arbitrage opportunities. With tokenized assets on NFTs, transaction speed becomes much faster allowing wealth implications to be felt by all participants in the digital asset ecosystem.

3)  NFT increases wealth because it builds wealth for creators and consumers

Lastly, NFT wealth implications can be seen through content creation. It allows people who have created unique tokens with specific attributes or features have a better chance of retaining wealth generated from their contributions. By owning digital assets, content creators are now incentivized to create quality work which leads to wealth accumulation.

These tokens can also create wealth for consumers because they allow them to purchase a variety of different products and services through the secondary market. Not only do these tokens help maintain wealth, but they also increase liquidity in the digital asset ecosystem which further benefits wealth distribution.

4)  NFT wealth implications in wealth distribution

Although wealth is accumulated through the NFT, it is only distributed when wealth has been created for consumers and creators. This wealth can be redistributed to everyone who benefits from digital assets making all members part of the ecosystem important contributors to wealth accumulation.

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