The shortest definition for NFT is that they are non-fungible tokens. The popularity of NFTs went through the roof almost one year ago. Many investors started to wonder if they should buy them or not.
NFT are not exactly assets, they are blockchain technology that can digitally verify the ownership of something. This means that they are more like the brand of the car rather than the car itself.
Should you invest in NFTs or they are just a thing of the past?
NFT sales went over the moon in 2021 with $17.7 billion, which was almost 200 times more than in 2020 – $82.5 million. Currently, up till May, the number is almost the same as last year.
NFT platforms are showing that it is attracting users from all over the globe and that the market is recovering and growing after the drop in users in March this year.
There are many cases where we had a small investment to result in a big return of income. Sometimes the price goes even up to 1000 times its first value. The value of the NFT is decided just as the one on crypto and that is with the law of supply and demand.
Currently, the demand and supply are increasing but the experts have divided opinions on how long the NFTs will be here to stay. Some experts think that NFTs are a fad and others that they will be with us for a long time.
Investing in NFT in the end is a personal choice. Some investors prefer investing in crypto while others in NFT. We think it is worth considering NFT art or music.
It’s not a good idea to invest in NFTs only if you want to make money real quick or if you don’t understand the market. Also if you are afraid of losing some money NFTs are not for you.
On the other hand, if you share the opinion with some experts that NFTs are the future that they are probably the right choice for your investment.
Finally, the best marketplaces where you can buy NFTs are OpenSea, Raible, and Foundation.
Popularity of NFTs
Why did NFTs become so popular? Before the pandemic that started in 2020, most people have never heard of NFTs and what non-fungible means. Now we have celebrities like Paris Hilton, Justin Bieber, Eminem, Jimmy Fallon and so many other who talks about NFTs almost every day.
The most expensive NFT that was ever sold was Pak’s “The Merge” which was sold for a whopping 91.8 million dollars. NFTs became a new way for artists to show their creations and at the same time have full ownership of them.
What do NFTs represent?
NFT is a token that can prove the ownership of a unique digital item. NFTs represent pictures of a bored ape, tweets that later can be turned into digital art, collectible punk faces, and other things that can be considered digital art.
Also, they represent smart contracts. They are the strong side of NFT because with them it is possible to buy or sell an NFT.
The difference with crypto is that NFTs are non-fungible. This means that they cannot be replaced with another identical item, because there are no two NFTs that are the same.
Advantages and disadvantages of investing in NFTs
Before investing in NFTs it seems like a good idea to understand to positive and negative sides of investing in NFTs. Here you can find the advantages and disadvantages of investing in NFTs:
- Anyone can do it and can be easily accessed by everyone
- They are secured by a blockchain. NFTs use blockchain technology to verify ownership.
- It is a great idea to learn more about the NFTs and blockchain technology
- They are not an asset, but a technological way to signify ownership.
- You need to own Ethereum to buy NFTs because most of the sales are on the Ethereum platform.
- NFT transactions require a lot of electricity. The average consumption of just one transaction is equal to the electricity consumption of an average family for more than a day.
Investing in NFTs has its advantages and disadvantages. Before deciding to invest in NFTs it would be a good idea to explore the market. Also, it would be a big plus to learn more about them and blockchain technology.
Investors invest in NFTs for many different reasons. Some of them want to own a unique asset, while others to have the same piece of art as some celebrities.
NFT investment can be a good investment, but also it can be risky. So make sure that you are ready and you know all you need to know before buying an NFT.
Also read: How to profit during a stock market crash