Non-fungible tokens (NFTs) have taken over the world. We talk about art, music, iconic video clips from NBA games, GIFs, Designer sneakers and even food. Some digital assets may cost you just few dollars, but others can go over millions.
Many people that are not into the material wonder what is an NFT?
It is a digital asset that symbolises a real-world asset that can be purchased and sold online, with the majority of transactions taking place in cryptocurrency. Why aren’t they interchangeable? Each NFT has a digital signature that prevents it from being exchanged for or equivalent to another, making it non-fungible.
NFTs have been there since 2014, but it is only recently that they have become a significant buzz among celebrities and the general public. Many ordinary people decide to invest in NFTs in the hope that their value would rise over time, resulting in a large profit. One of the most expensive NFTs was sold for $69.3 million, and it was produced by Mike Winklemann, better known as “Beeple” a well-known digital artist.
But why are people willing to pay such a high price for a digital asset?
Because an NFT allows you to possess the rights to the original thing. It includes built-in verification that verifies who is the legal owner of the piece, similar to how bitcoin works. It is regarded as an excellent investment strategy, as artists are no longer reliant on galleries to sell their work. Where can you get NFTs? It’s really simple: you’ll need a digital wallet to store them alongside cryptocurrency; you can use services like Kraken, eToro, PayPal, or others.
When we understand what NFTs are, the main question is whether they are just a hype or anything more? Because their future is uncertain, some experts in the area believe they are risky, thus it may be prudent to begin with minimal investments.
You should constantly remember that their price is determined by the market and demand, thus buying an NFT does not guarantee that you will make a profit. Similar to stocks, if no one wants it, you may not be able to resell it at all. They are also subject to government taxes; therefore, treat NFTs like you would any other investment.
Do your homework and don’t underestimate the dangers. take care and don’t forget to have fun. Like and Share our content for more useful information!