If you have been questioning how do NFTs work, you may be at the crossroads of pondering the pros and cons of such a technology. There are certainly a lot of pros to NFTs that a lot of people will want to tell you. But critics of the technology will also like to share some of the cons and potential dangers of the prevalence of NFTs. Read on to see a few arguments from both sides.
Pros – Blockchain Technology is Very Safe
One of the most significant advantages of NFTs that anybody will tell you is that NFTs are built into the blockchain, which makes them very safe. Blockchain ledgers keep track of every transaction on them, so they are virtually impossible to try to hack. This makes them very safe, and this is one reason many people put their trust in them. Because of how safe NFTs are, they are being used to keep ownership records. Valuable assets can be created and stored as NFTs, and many people trust them because of how reliable the blockchain is.
Con – Possible Fraud
While the technology that NFTs are built upon is very safe, it does not change the fact that the NFTs that are being bought and sold cannot do anything to keep from people committing fraud. Fraudulent NFTs have been popping up here and there recently as everybody seeks to cash in on the most significant trend in Web 3.0. However, the fraud in the NFT community is not a symptom of the technology not working but is a consequence of bad actors abusing the system for their benefit. Even if a fraudulent NFT is created, the blockchain technology it is built upon will still function perfectly for it until the NFT is taken down or removed.
Pros – Fractional Ownership
NFTs and the blockchain technology they are built upon giving owners the ability to safely and reliably have fractional ownership of properties in a way that may be difficult to impossible for any other properties you may own. Other properties you may own are generally more challenging to have fractional ownership over. Things like artwork, jewelry, or real estate are a lot more difficult to buy only a portion of, but in the way, the NFTs are designed, fractional ownership is built-in and can be done.
Cons – Nfts are Not Assets
Because of popular conventions and how NFTs are referred to in the news, it can be easy to believe that NFTs are an asset, but in reality, they are not. Yes, many people have been using them as investments and with the intention of making a profit or income, but NFTs themselves are not technically assets. NFTs are more a new and developing technology and a tool for verification than they are an asset. The general popularity and volatility of the technology at the present moment have fueled many to believe that they are profitable ventures. However, they are still only a technology that can be bought and sold and not an asset in and of itself.
Pro – Accessible to Everyone
NFTs are very accessible in that they can be bought and sold by anyone interested in them. The barrier to entry is as low as an Internet connection and perhaps a gas fee. A variety of NFT marketplaces built on several different cryptocurrency coins means that you can find NFTs and NFT blockchains built for every other price point and whatever technical ability you might have. Mainstream NFT markets like OpenSea or Rarible have become as simple to use as YouTube or Instagram. Still, if you have greater skills in the Web 3.0 crypto space, you can find platforms with greater variability.
Con – Volatility
At the present moment, the NFT market is very volatile. Many people are currently buying and selling any NFT they can get their hands on. For some buyers and sellers, this is a good thing, it maximizes their potential to go through with expanding the market, but this volatility also creates a lot of uncertainty. NFT prices can skyrocket at any moment, but they can also flatline just as quickly. Many people are making a lot of money off of NFTs, but they can lose it just as quickly.
Should You Buy an NFT?
As you can see, there are many things to consider when looking into buying, selling, or trading NFTs. As with anything, there are a lot of factors that go into it, a lot of pros and several potential cons. If you are looking at getting into NFTs, you should take some time and do some research, especially before spending any money. Still, NFTs are a very popular and exciting new technology with many use cases. NFTs can be great for our possible future. If you are interested in them, you may do well to take a chance.