Asset-Backed NFTs May be the Solution to Fear of Bubble
It is no surprise that NFTs, like many other technologies not yet fully explored by the general public (it took us a while, too), have already been labelled as a bubble that will eventually burst. To some, it seems that investing in NFTs could appear as an irrational choice. Since an NFT is a digital asset, why do people spend phenomenal amounts of money on it?
A Bubble or a Revolution?
The truth is, a product that solves a real problem is unlikely to become a bubble. An NFT is a unique crypto token with the purpose of serving as a blockchain-derived, cryptographic certificate of ownership rights for a digital or physical asset, where the product’s history and information are transparent and immutable. The main feature is that it exists in a single copy and cannot be replicated. With that technology alone, cases of counterfeiting can decrease dramatically in the long run.
Key benefits of NFT technology revolve around their:
— authenticity; all data, including product information and history, is stored and cannot be altered.
— transferability; the transfer of an NFT (and its ownership rights, of course) is based on smart contracts that are secure and immune to interruption.
— transparency; all records including an item’s origin history, transactions and ownership rights transfers are transparent and traceable.
So, could it be that it’s not a bubble but rather a revolution?
The New Alternative To NFTs — Asset-Backed NFTs
For those who still fear that NFTs might be a bubble but want to try the new technology, there is a so-called ‘safety bag’ for you. Here we are going to introduce to you the concept of asset-backed NFTs. You may ask “what does ‘asset-backed’ even mean?” To put it simply, it is an NFT that is tied to a physical asset, thus guaranteeing a minimum value for an NFT where the value of the digital certificate remains unpredictable.
LuxFi believes that asset-backed NFTs are the next revolution for e-commerce. This is especially the case for luxury assets that steadily and reliably hold their value well and maintain a high resale value. Once authenticated assets are converted into NFTs (let us repeat it one more time, the data of NFTs are immutable and permanently stored on the blockchain!), it adds even more value to the physical assets. Using NFTs as the new type of ownership for physical items thus ensures better security for buying, selling and investing.
LuxFi is the world’s first asset-backed NFT marketplace for luxury assets, where people can buy, sell and invest in luxury assets using cryptocurrencies and traditional payments. We eliminate counterfeiting while minting an NFT on a multi-chain blockchain network, with a focus on luxury assets that hold value well and have a high resale value. Leveraging our big data intelligence system and unique algorithm for automated data collecting and data processing, the value of each NFT on our platform is backed by real-world data.
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