What’s the hype of NFTs all about? People wonder, ‘Is NFT a joke or a giant scam?’ This is a difficult question to answer. On the one hand, Non-Fungible Tokens are a new and innovative way to trade digital assets. On the other hand, some people hate NFTs and believe that NFTs are nothing more than fraud with no real value.
But we will explore a few deciding factors and reasons in this article. First, understand what NFTs are basically and why people are buying them.
What are NFTs, and What’s their Hype?
NFTs or Non-fungible tokens are digital assets that are verified on the blockchain. They are unique and can’t be replaced by anything else.
That’s why people are calling them ‘digital art’ because each NFT is like a piece of art that is one-of-a-kind. There are now various softwares to create NFT animations and collectibles. Unlike normal cryptocurrencies, you can’t just exchange one NFT for another because each one is special in its own way.
The reason why people are buying NFTs is that they cannot be replicated. So, it is like buying a limited edition item that would continue to appreciate its value.
They are very secure, and there is no risk of them being hacked or stolen. The real-world assets being turned into NFTs are also very valuable, such as digital art, music, and even tweets. So, this is the hype and why people are buying NFTs.
Is NFT a Joke or a Giant Scam?
Some people ask if ‘it is NFT a joke or a giant scam’ because it is easy to create an NFT. All you need is a crypto wallet and some tokens. There is no guarantee that the value of an NFT will appreciate, so people are worried that they are buying digital garbage.
However, it’s not a reality because people buy NFTs for the same reason they would buy any limited edition item. After all, it is unique, and there is a possibility that it will go up in value.
So, the answer to ‘Is NFT a joke’ is no. NFTs are not a joke, and for this, a few reasons cater to your query. Let’s explore them now.
NFTs Have Real-World Value
NFTs are not just pieces of digital information; they are backed by something tangible. For example, an NFT can be a digital art piece that is stored on the blockchain. The artist has created something unique that he is selling as an NFT. So, there is a real-world value to the NFT.
NFTs are Scarce
A limited number of NFTs can be created, so they are considered scarce. It makes them valuable because there is a limited supply. To prove NFT is not a joke or scam, we need to look at the economics of supply and demand.
When there is more demand for an item than there is available supply, the price of the item goes up. This is what is happening with NFTs. However, keep one thing also in mind NFTs are not haram.
Ensure Transparency
The entire history of an NFT is stored on the blockchain. It ensures transparency and eliminates the need for third-party intermediaries.
Thus, it makes NFTs very trustworthy; now, who says it is a scam? Even the US government is looking into using blockchain technology to create digital birth certificates, driver’s licenses, and other documents.
Verifiable and Secure
The fact that NFTs are stored on the blockchain means that they are verifiable and secure. No one can hack into the blockchain and change or replicate the NFT.
If someone tries to sell you a fake NFT, you can easily check the blockchain to see if it is real. Even if someone takes screenshots illegally of an NFT, the original NFT will still be stored securely on the blockchain.
No Central Authority
NFTs are stored on a decentralized network, so they are not controlled by any one person or organization. So, it proves NFTs are very resilient to censorship.
For example, an artist can create an NFT that is critical of the government, and there is nothing the government can do to stop it from being circulated.
Permanent Asset
Once an NFT is created at a famous marketplace like OpenSea, it is there forever. No one can destroy or take away. So, NFTs are very valuable because they are permanent and scarce.
So, no need to take it as a joke now. Even though anyone can create an NFT, the value increases with time as more people enter the market and demand grows.
Final Verdict
So, we can say that NFTs are not a joke or a giant scam, and there are many reasons to support this argument. You have to take a few precautionary measures while buying NFTs. Such as doing your own research, investing only what you can afford to lose, being cautious of people who are selling NFTs for too high of a price, etc.
Other than that, NFTs are here to stay and will become more popular in the coming years. So, go ahead and start buying NFTs.