If you have been browsing the web for the past few years, then you may have heard about NFTs. So, what exactly are NFTs, and why should you invest in them? And, how do you invest in it?
In this article, you’ll learn the answer to these questions and more.
NFT Art – What Is It?
It’s best to start with the basics so you’ll quickly grasp the NFT topic. And, there’s a bit of history.
Before the digital world, duplicating an item will cost money. For example, if there’s a shoe and you want to duplicate that one, you’ll have to pay for labor and raw materials.
This all changed with the advent of computers. After all, duplicating an app, program, or file is just a matter of copy-pasting. It is truly an innovation that changed the world. However, there are things in this world that you don’t want to easily duplicate. One good example is fiat currency. Allowing anyone to duplicate money will lead to an economic meltdown.
So, how do you prevent anyone from duplicating in the digital world? As it turned out, this was a very complex question, and it took decades before a proposed answer emerged. And, that answer is blockchain technology.
Nowadays, blockchain technology has been applied to currency. Most people have heard about Bitcoin, and it’s the most famous blockchain.
Somewhere down the line, some people realized that works of art are also something you don’t want duplicated. Blockchain technology is then applied to the art sector, and NFTs are born.
NFT is short for non-fungible tokens. With art NFTs, this means that a piece of art cannot be duplicated. Technically, it can still be copy-pasted, but it will be a “fake” because the duplicated copy cannot be authenticated in the blockchain.
Why Invest In NFT?
* High Rewards
Since this article is mostly leaning towards a financial-related piece, then the first benefit to mention with NFTs should be the potentially high rewards. However, this article is not saying that it’s financially safe.
In the financial world, high rewards will often come with high risk. If you want low risk, then you’d have to settle for low rewards. Scam land is the only place you can find high rewards with low risk.
One of the primary reasons why NFTs come with tremendous potential gains is because it’s still new. As it gets more and more adopted by the public, more people will buy them. This raises the demand. Since you got your NFTs when the demand was not quite high, you’ll often reap great rewards when you sell them.
However, the risk is that if the public never really adopts NFTs, you could be left with an asset with little demand.
* Effortless Authentication
Blockchain technology is used to store NFTs. Hence, the data are immutable, which means that they cannot be modified or altered in any way.
Authentication is also effortless as the blockchain is a public ledger, and anyone can check it.
This is drastically different from purchasing a work of art from an internet or offline vendor. There is a possibility that you are getting a mere copy rather than the genuine one. Of course, you can have it authenticated. However, that will also open another can of words. You either have to trust the authenticator or trust the certificate of authenticity.
There’s no need to trust anyone with NFTs. All you need to do is check the blockchain for authenticity.
Another good reason to invest in NFTs is for diversification. You probably heard the saying, “don’t put all your eggs in one basket.” Well, that’s what diversification is all about.
For example, you’ll be in deep trouble if you are solely invested in stocks and the stock market plummets. You protect yourself from investing in various assets like real estate, stocks, bonds, or crypto. By spreading the risk, you won’t get knocked out of the game with just a single blow. For now, NFTs are an excellent addition for diversification purposes.
How To Invest In NFTs
The crypto world is relatively new, and investing in NFT can get complicated. Thankfully, there’s an easy and uncomplicated way of investing in NFTs.
You can just either use a website or app that is specifically designed for NFT trading. A good example is the NFT Profit app. If you have bought a cryptocurrency before, you can intuitively understand how these NFT trading apps work.
NFT is all about revolutionizing works of art in the digital realm. With NFTs, anyone can verify that the art they own is 100% authentic and not fake. It’s also an excellent medium for investing because the technology is still new. If one day it gets public adoption, you may end up selling a piece of art for ten or even a hundred times more than you bought it.