Many factors underlie the creation of what people perceive as “valuable,” and one of the most common arguments against NFTs is whether they have value since they are intangible and usually represent digital items rather than real-life, physical assets.

But one thing we can agree on is that we spend much of our time in the digital world, so it makes sense that people naturally find digital items valuable. That’s the great part about blockchain technology and NFTs – that digital items can finally have value since we can attach ownership and authenticity to them.

There are two main considerations that contribute to the value of an NFT: 

• Scarcity 
• People agreeing it is valuable

NFTs allow for proof of ownership in the digital world, which wasn’t possible before. But due to blockchain technology and NFTs, the principle of ‘scarcity’ now also exists in the digital world. This is because each NFT is rare, unique, and indivisible. So, when a digital asset is tokenized, it creates value since it is possible to prove its authenticity and ownership and can be bought and sold many times over.

Of course, scarcity isn’t the only thing that creates value in NFTs. People and communities have to collectively agree that something is valuable for it to be valuable.

There are tons of NFT projects coming out every day now, and their value will depend on what items are being sold. For example, is it an NFT representing some type of in-game item, a song NFT by a famous musician, or an NFT representing a digital collectible from a generic NFT project which also offers other benefits if you buy it?

As you can see, determining the value of each of these will differ hugely depending on the project or item.