NFTs are also known as non-fungible tokens and are a buzzword nowadays. They are the hype in the cryptocurrency industry and are a niche market in the blockchain industry. However, apart from here the term NFT, what else do we know about this trend in the crypto world.
A lot of people are buying cryptocurrencies and NFTs nowadays because they have more value than actual money and are safer in some ways, even though they can lose their value pretty quickly. So, without further ado, let’s dive into this blog and learn some of the reasons why you should invest in NFTs.
What is an NFT?
As stated earlier, NFT stand for non-fungible token. If you don’t have an English degree or are in the crypto world, then you most likely have no clue what fungible means. Non-fungible means that the thing is unique or cannot be replaced with something else. For example, your traditional bitcoin is fungible can be traded for another bitcoin or its value in cash. It is like a blue-eye white dragon card but rarer, and it is a one of a kind.
You can trade something else for non-fungible tokens, but there is not else like it out there. They are part of the Ethereum blockchain and is a blockchain that stores extra information, and this makes them work differently from an ETH coin. An NFT can take the form the literally anything, and it can be a drawing, a VR bar, or even music.
As stated earlier, they are a bit like collectible items or even Pokemon cards, which you can trade and exchange. Think of it as an adult trading card gaming, getting your mind out of the gutter, not that type of adult game you’re nasty. It is a bit like art that is unique, like the Mona Lisa, there are replicas out there, but they can’t compare to the original.
Owners of non-fungible tokens can sell or trade them however they want on a specific marketplace. Unlike other forms of trading, you can accomplish it without the aid of intermediaries, and you can auction these assets at your will.
Unlike your common bitcoin, NFTs are safer to invest in, which means that you can sleep soundly on both ears. Unlike physical items like cars, The value of NFTs does depreciate automatically over time, which means you have assured a safer future instead of investing in more traditional stocks.
With NFTs, it is the community that decides, control, and builds the environment, and this means that is you have a say in what is going on in the state of your non-fungible tokens. That is, the majority of the community decides on the status and direction of the market.
Blockchain is really safe and has very secure sets of procedures. This unique feature of this specific type of cryptocurrency means that they are resistant to manipulation and fraud. Unlike centralized databases, it is more difficult to hack or cyberspace any specific blockchain, and it takes a lot of power to do so.
Because they are collectible items, it means that they are rather rare, and there aren’t a lot of NFTs on the market currently. Because for something to be considered a collectible item or object, it has to be rare. Because there are a restricted amount of non-fungible tokens out there, it means they are in high demand.
According to basic economics, the more something is in demand, and the less it is on the market, the more its price will be. That is, having a limited amount of highly demanded non-fungible tokens on the market means that their value will automatically increase. This is one of the main reasons why they are very popular and secure investments.
Because they are non-fungible, it means that each one of them is unique and that they cannot be swapped or traded for a similar item. And thanks to the addition of blockchains, they can now be verified as unique and real, and the scarcity of these alone makes them a sound and solid investment.
Personally, I don’t really vibe with cryptocurrency because they are awful for our environment, and mining even one coin causes a massive carbon footprint. Sound off in the comments section below and tell us what you want to read next and if you want to read more about non-fungible tokens.