• Tue. May 21st, 2024

What is a NFT and Should You Invest in Them?

NFT

 

NFT is now the most popular digital trend in the world right now. Someone is trying to buy as many tokens as possible and earn on the crypto exchange, but someone still does not understand why some pictures in 2022 are so expensive and consider it a financial pyramid.


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One can understand people’s distrust of this new phenomenon, because society always reacts in this way to something that it does not know. Ten years ago, no one could have thought that they would invest in promoting social media accounts, but now all creators buy Instagram followers and order ads to increase their statistics. The same thing happens in the cryptocurrency market.

Today we will try to understand what NFT is and whether it is worth investing in it.

NFT

What is NFT?

Many of those who do not understand this area consider such a token to be a cryptocurrency, but this is not entirely true. It is an intellectual property product which is a kind of asset. The owner of this asset can sell it on the stock exchange or keep it.


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Unlike currencies, such tokens cannot be replaced by other similar ones, because they are unique and have no analogues. They can be sold to get money in return in the form of cryptocurrencies or, for example, dollars, but this is more like a real store of goods.

In fact, NFT allows you to secure the intellectual property rights of any object that is in electronic format.

Is it safe to store such an asset?

It certainly seems safe that the work with the token is independent of third parties and the owner himself decides how to dispose of his token, however, there are still many problems associated with the NFT exchange.

As in the currency or securities market, there are cases of illegal transfer and receipt of tokens, after which the procedure for returning them to the real owner must begin. This is one of the problems due to which people are reluctant to invest in this area and do not want to take risks.

NFT

It also works with social media, when creators are afraid to pay for advertising or buy real Instagram followers on a special website, because they don’t want to lose money and take a long time to try to return it. However, everything is much simpler here because you can turn to well-known bloggers for advertising and experienced services to increase the audience, and then everything will be fine.

It is not obvious to many people that an NFT associated with any work or object from the real world may not provide the owner of the token with any exclusive rights to such an object. If there is no special condition in the terms of purchase that an NFT certifying the exclusive right to an intellectual property object is transferred to the buyer, then it must be assumed that the NFT only certifies the right to own a digital copy of a certain object.

A controversial point is often the situation when a person has bought a token and considers it his property, but is faced with the indignation of the real owner and his other buyers. This is not known to everyone, but not in all cases after the purchase you become the sole owner of the object.

Before buying, you need to carefully read the terms, because often the purchase means the acquisition of possession of only a copy of the object. In such a case, you have no right to the original object and cannot allow it to be modified or given to others for use. Such a deal assumes that you can only dispose of the copy that you have purchased.

Is it worth investing in NFT?

Yes, this is an investment that requires certain risks and is not a guarantee of income, especially permanent. However, you can enter into contracts in which you will prescribe all the conditions that you need and then you will be able to buy and sell original objects and not just copies.

Such objects can be music tracks, pictures or videos. If you are a creative person, then the NFT exchange is your chance to become famous due to the hype around this topic and start earning not only by selling tokens, but also by creating new releases.

In addition, the advantage of this method of selling content is that you can receive a percentage of each resale of your unique token, even if this transaction takes place long after yours. This can be called passive income through the sale of a token.

You have the right to independently decide whether it is worth investing your money in it, and we only recommend that you cooperate only with trusted exchanges and avoid scammers. With the right approach, you can achieve success in the crypto industry.


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Kevin Moore - E-Crypto News Editor

Kevin Moore - E-Crypto News Editor

Kevin Moore is the main author and editor for E-Crypto News.