Get to Know NFT : Is It Worth To Buy and Invest?

NFT marks the latest evolution in blockchain-based assets, moving beyond cryptocurrencies, stablecoins, governance tokens, and utility tokens. The presence of NFT aims to provide users with a new type of digital asset with an innovative ownership and distribution model.

Get to Know NFT

An asset with fungibility means that each unit is identical, interchangeable, and divisible. Fungible assets are used every day such as US dollars, Bitcoins and even rewards points. In contrast, non-fungible assets mean that each unit is completely unique from one another.

For example, real estate is not fungible as each property is different from one another due to various features such as layout, size, location, zoning, utility and valuation. NFT (Non-Fungible Tokens) extends the concept of non-fungibility by leveraging blockchain networks such as Ethereum to represent unique digital assets.

Read : NFT, Profitable Cryptocurrency

What is NFT?

WHAT IS NFT

The word “non-fungible” means one and only, so NFTs are unique and cannot be replicated or substituted for anything else. So, Non-Fungible Tokens aka NFTs are digital assets that represent real-world objects such as music, art, digital avatars or pictures, videos, or other collectibles but cannot be duplicated.

As already explained, NFT is a unique asset that cannot be replaced directly with other assets. On the other hand, a fungible token is a token that can be replaced by another token identical to it. Each NFT is so unique, that there isn’t another one quite like it out there.

Digital code is written into these digital tokens and recorded using the blockchain network on which it is based to prove the historical holdings and current owners of unique digital assets.

What exactly is NFT used for? The recent craze surrounding NFT is for digital art collections. For example, in March 2021, an NFT representing an image titled, “Everydays: The First 5,000 Days,” by artist Beeple was auctioned by Christie’s for $69 million.

NFT buyers now have digital art ownership attached to them. Artists can use NFT to sell their creations to collectors. The owner or creator of the NFT may also collect royalties for copies or online use of the art.

Not just a digital asset, NFT is also a way to enforce digital copyright and trademark law. As well as representing a way for digital artists and other creators to monetize their work, NFT is envisioned as an evolution of investing and art gathering and becoming part of a new cryptocurrency investment asset class.

Is NFT Safe?

Are Non-Fungible Tokens safe to use? In general, buying and owning NFT is as safe as buying and owning cryptocurrency. However, even though the technology behind NFT is considered safe, there are still some things you need to do to make sure your investment is safe.

It’s no secret, there will always be hackers or other criminals trying to steal any asset, physical or digital, that has value. Although NFT is still in its infancy from a market perspective, the rapid growth in popularity has opened new avenues for hackers.

Although NFT proves that a particular piece of data is unique, it cannot prevent someone from marking something that doesn’t belong to them. Fortunately, there are legal safeguards you can access. Standard copyright laws may apply to NFTs.

If, for example, you believe your digital art has been appropriated, you can file a takedown notice against the sale of this platform and the creator of this NFT using the Digital Millennium Copyright Act (DCMA).

NFT Safe

Is NFT Investment Risky?

Buying and trading NFTs is different from collectibles in real life. As with cryptocurrencies, of course there are serious risks that could cause you to lose money. Here are some of the main risks of NFT to watch out for:

1. Evaluation

Like any collectible, buying NFT is a risky bet on rising value. But unlike trading cards or buying real paintings, NFT is still a new market so it’s unlikely that there will be the same demand.

If there’s no demand for the NFT you bought, then you could end up paying a large amount for something that’s gone down in value or that you can’t sell. Apart from that, you can also create your own NFT but there is no guarantee that a buyer will buy your NFT. This can waste your time and money.

2. Storage

NFT sales are recorded using blockchain technology, which proves ownership. However, the real NFT is created and stored through marketplaces and platforms. If this platform is closed, there is no guarantee that you will be able to access the work.

Therefore, NFT storage on the platform is considered less secure than if you have physical art hanging on the wall or trading cards in real life that can’t just disappear.

3. Rules

There is no NFT regulation so a lot of trust is required. In this case, you may believe that the NFT you purchased is a unique work and has not been copied from elsewhere or you could face a copyright claim.

Additionally, if regulators and lawmakers become concerned about an emerging market, there could be a crackdown on the platform and restrictions on how much collectors can invest. This can push the market value down.

The lack of a regulator or ombudsman also means no one investigates your complaint, or holds the company accountable, when something goes wrong.

Read: JOSS Tokens Can Be Purchased on QuickSwap

This is information about NFT. So, what do you think? Would NFT be a good digital asset to buy and invest in? All back to their respective choices. Before starting any investment, it’s a good idea to study it first and don’t forget to find out what the advantages and disadvantages are.

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