If you run a craft business, it’s easy to find suitable assets. Factory owners can invest in new production halls, new production lines or even in other companies. But if your business is digital-only, the possible selection of assets that support your core business is a lot smaller. But don’t despair if you´re out of ideas for smart investments.
The following tips can help you find the store of value for your capital that matches your business best. Benefit from investments that are just modern and promising as your own business.
You may have never heard about NFTs, but you sure have heard about cryptocurrencies and blockchain technology. Even though NFTs differ from regular cryptocurrencies in many ways, they´ve got a lot in common with them, too. The so-called Non-Fungible Tokens are traded and administered on the blockchain. But other than coins like Bitcoin, Litecoin or Ripple, NFTs aren´t mere stock values.
Even though the tokens do have their own volatile price line, their actual value is individual. It is the investor, who determines the value of a token by investing a certain amount of money or Ether in a specific piece of digital creation.
An NF token is unique and not interchangeable. Once you buy it, you own it. The token will stay attached to you. But what are NFTs for and where does their value come from? Visit https://nftexp.io/blog/nft-just-hype to get more information on the hype around the new type of asset.
How NFTs Work
An NFT is a token that represents the value of a digital creation, usually of a file. With your NF token, you can purchase a piece of digital art. That could be a certain video game or even a baseball card.
In order to make an investment, you need to pay in cryptocurrencies – for most NFTs, that´s Ether, as the tokens are administered on the Ethereum blockchain. The financial equivalent of the amount of Ether you pay generates the actual value of the item you bought.
That means you´ll need a crypto wallet so as to be able to store your NFT as well as the Ether coins you´d like to invest. Keep in mind that trading a fiat currency like Pound, USD or Euro in for Ether doesn´t make you a trader in this case – you simply switch your currency for the digital one in order to place your payment.
If that leaves you skeptical, this piece of information may help you change your mind: In order to offer NFT art at their auction, auction house Christie’s has started establishing ETH payments as a regular and welcome payment method. If a well-known selling point of fine art can trust in the Ethereum blockchain, investors can do so, too – Christie´s really set a sign there.
Why Would You Want to Invest in Digital Art?
You may be wondering where this is leading to. How can your business benefit from a digital file and from an attached token that’s sitting on the blockchain? Art has always been a highly recognized store of value.
Investors, who managed to purchase a highly demanded painting or sculpture, could not just invest capital in a safe way, but in many cases also pave the road for an increase of value.
The most valuable piece of NFT art sold for almost 70 Million USD worth in Ether. It wasn´t sold on the internet, but by the well-known auction house Christie’s – the beginning of a revolution on the market of art and collectibles.
The collage “Everydays: The First 5000 Days” was created by an artist named Beeple and sold not to a private person, but to a company. The company’s goal? A good NFT investment. That exceptional example shows how much investors trust in the growing niche of NFT art.
Investing in Other Businesses
If you plan on expanding your company, you need to invest. But instead of investing in real estate or patents, you could also participate in another business.
Startups are always on the look for investors, who can help them turn their greatly innovative ideas into results. While many of those founders are financed by crowdfunding, others prefer a smaller yet more solvent group of investors.
If you decide to become an investor, you should negotiate the company participation in percentage and the decision-making authority that you can obtain in exchange. If both parties are happy with the onboarding process, you can transfer the capital.
If the startup is successful, you earn money through it. Of course, there is always a fair chance that the business idea you invested in may fail. That is why you should research thoroughly before contacting the founder.
Are picking Businesses Similar to Yours or Completely Different Ones?
For some investors, it can be smart to invest in a business that works in the same niche as them. But instead of going for a competing company, find one that compliments or completes your offer.
Other investors prefer investing in companies that have a whole different target group. If your niche suffers a downward-trend, the niche of your investment could still thrive and compensate for your financial loss. It can make sense to combine different investments together.
Supporting Entrepreneurs Who Launch New Cryptocurrencies
Many digital startups decide to create their own blockchain. In many cases, that makes a lot of sense – especially if the innovative idea is based on decentralized data.
When a business organises its ICO, which means Initial Coin Offer, interested parties can become part of the investor pool by purchasing the newly-launched crypto coins or tokens. If the business idea works out, the coins usually gain value quite quickly, which you can benefit from as an investor.