NFTs are part of the current boom in the crypto market. In 2020 alone, the amount of traded NFTs exceeded $250 million. That is according to what NonFungible reported. According to 2019 sales, the market witnessed a 299% increase. With that, can you or anyone invest in NFTs?
Firstly, what are NFTs? Well, Non-fungible tokens (NFTs) are elements containing the copyright and ownership information of a given item. You can purchase these token in music, in-game, sports cards, art, and virtual land collectibles. Although less common, you can still buy Non-fungible tokens for real-life collectibles.
Fungible items are interchangeable with similar products. For instance, you can swap a $20 bill with another $20 one. Moreover, you can interchange it with two $10 bills. Contrarily, original art is unique therefore non-fungible.
What to Consider When Purchasing NFTs?
Before investing in NFTs, keep in mind that you are dealing with a new unpredictable and volatile market. For now, there are worries about crypto activities energy usage. Here are some factors you may have to consider:
It’s a New Market
No one can predict what the NFT sector will have in some years to come. In this market, you can never be sure of the future. A digital art costing million today can appreciate or depreciate. No one knows for sure.
Although experts suggest that NFT is here for long, many people are skeptical about the market’s permanency, calling it a bubble.
Theft and Fraud
The best thing with Non-fungible tokens is that digital artists can utilize them to own their effort. However, the benefits do not imply that NFTs are not susceptible to online theft and fraud.
Unfortunately, artists are complaining about their artwork tokenized without their consent. For now, the chances that artists can reclaim their lost work are not clear. The best way is to find a legit NFT exchange when you want to purchase these tokens.
Should You Buy NFTs?
Most problems with NFTs as of now are solvable. However, the market is in its early stage. No one knows how the platform will approach the challenges and whether early NFTs adopters will be safe.
Purchasing NFTs now can be a risky venture with the high volatility in the market. However, if you know to alleviate the risks, you can try your luck.