NFT or Non-fungible tokens are blockchain-based tokens that have a value stored in them digitally. To make your NFT unique and more valuable, you can add any form of digital file or asset to it. More than an asset, think of NFT like an art. Artists made that piece of art, and you can buy it from the artist to own that piece of art.
What makes NFTs unique?
The sole reason behind what makes an NFT so unique is the ownership. One NFT can only have one owner at a time. And NFT’s unique data makes it easy to verify and transfer ownership of NFTs between owners. Like in the real world, you can scam people based on proof of ownership. But that can’t happen in the NFT space due to the blockchain tech it uses.
Pros Of NFT
- The first and foremost benefit of an NFT is ownership. Based on the blockchain network, it is impossible to scam people based on ownership in the case of an NFT.
- NFTs are easily tradeable and exchangeable. You can buy/sell them on exchanges or marketplaces.
- NFTs have created a whole new employment sector. A sector where creators/developers create NFTs and sell them for profit.
Cons of NFT
- The uncertain value of an NFT is its biggest disadvantage. The NFT market is bullish right now, but you never know for long will it be. Will it still sell like crazy in the future?
- Well, the creation of NFTs is not very environmentally friendly. It accounts for a large amount of power usage.
Should You Invest?
NFTs are original pieces of art/asset. If the NFT is a collectible item from history that had a significant impact on the world, it can have a highly appreciated value in the market, making it interesting for collectors. Investing in NFTs is a pure gamble. You bet on the NFT for its price to rise high in the future. But it is very uncertain. Owning it as an asset can be great. But owning an NFT as an investment is not the most ideal thing for a common investor.