Should You Buy an NFT?
Should You Buy an NFT: It’s been just over a year since the NFT trend rose to prominence. For many consumers and web users, it came as quite a surprise that something with apparently no value – seeing as it only existed in digital form – could be worth so much money. Now that the market has matured and there have been hundreds of thousands of NFT sales, you may be wondering if this is now a less risky asset class to invest in. This article looks at whether this is the case, examining the latest evidence regarding NFTs and the interesting world of cryptocurrencies.
What is an NFT?
First, just in case you’re unsure of exactly what an NFT is, it’s worth explaining what you’d be getting your hands on if you bought one. NFT stands for Non-Fungible Token, which essentially means that you’ll own a token of something that cannot be copied by anyone. You’ll own a unique digital item, one that no one else can claim to know. Because NFT is run on the blockchain, there’s a public ledger of sales and ownership records that will always identify you as the owner of the NFT if you purchase it – until you sell it, of course.
Why Buy?
There are three main reasons that people are buying NFTs at the moment. The first is the most obvious: even though it is a relatively high-risk investment, it’s seen as a high-reward option to explore. While the financial markets continue to tumble and take hits of influence from world events, many investors are looking for a new way to invest that could make them heaps of cash. People are also investing in NFTs because they believe they may be able to use them in the coming digital “metaverse”, and they’re investing in them because certain NFTs could give you access to exclusive clubs or groups in the metaverse.
Should You Invest?
If you’re completely unaware of how NFTs, the metaverse, and cryptocurrencies work, it’s highly advised that you first read into these three future-facing technologies before you dive in to buy your own. The internet is replete with resources to help you understand what they are, how they work, and what they could do in the future. If you’re fully aware of what an NFT is, and how you can purchase one, it may well be worth browsing purchasing options at an NFT marketplace in order to see if there’s anything that matches your budget.
Risk and Reward
There are several prominent technologists and futurists who believe that NFTs are the early-investment coup that could be likened to Bitcoin. What they’re saying is that buying an NFT today could be the equivalent of purchasing Bitcoin back when it was worth around a dollar. Still, purchasing a Bitcoin in the early days was a significant risk, and the same is the case today with NFTs. If you’re comfortable taking this risk and you have the capital to make a bet on the rise of this asset class, then this might be a worthwhile area in which you can invest in 2022.
There you have it: some key tips about investing in NFTs in 2022.