Non-fungible tokens, often being called NFTs, are taking the digital world to places we never imagined. The eye that traditional collectors value art with is now being applied to pieces that are purely digital in nature. What’s truly exciting about these developments are the prices that people are paying for these collectibles. Though collectively bought by roughly 30,000 investors, the most ever paid for an NFT was $91.8 million. This is only the beginning for now.
The myths that follow these transactions, however, deserve some attention. Unless you want to go astray in the emerging digital world, make sure that you don’t fall for the following misconceptions.
That NFTs Have No Value
Nothing has value beyond what people are willing to pay for it. A small group of enthusiasts, however, isn’t enough to raise prices to millions of dollars. There’s a larger world out there regarding the interest in collecting blockchain commodities. All NFTs are supported by and made possible through blockchain. As long as cryptocurrencies and distributed ledgers remain in society, sub-developments like non-fungible tokens will continue to make marketable sense.
That They Consume Too Much Power
For starters, companies are reducing their carbon footprints worldwide. There’s a major trend to lower energy use and even convert to renewable sources. The United States is now leading the world in its attempt to power blockchain via solar-powered panels. There’s no immediate threat or evidence to suggest that NFTs are consuming more power however. These tokens are made apart from their blockchains. Unlike crypto, they’re then sold in a single transaction.
That There’s No Money Behind Them
The investment potential of NFTs is dependent on where you enter its market. Both sides have inherent risks, for one investor creates artwork while the other buys it. Working to leverage the creative aspect of NFTs is how most participants will profit at first. This means that the artist is reaping the true wealth produced by NFTs. Until these digital possessions become more widely used, the individual collector will likely fall behind the success that the artist will have.
That Blockchain Makes Them Too Complicated
No, you don’t need any type of experience with blockchain to become an active investor in NFTs. In fact, you might never actually encounter a blockchain, for you can, through the personal website of NFT artists, surf databases with images and purchase buttons. Other than knowing art and what appeals to people, computer science skills aren’t required. Your ability to operate a mobile device and internet is enough for a successful venture.
Studies show something contrary to what most people believe about bitcoin. Criminals are actually 800 times more likely to use cash for their criminal enterprises. The blockchains used to power NFTs are transparent and make it difficult for criminals to launder money. Additionally, the artists and NFTs that exist are publicly known. These artists and collectors have a need to maintain legitimacy in how they venture.