Since the emergence of cryptocurrencies, there are many more investment opportunities to choose from. NFTs are becoming a popular investment choice; the future of NFTs is looking bright.
NFTs provide you with something unique, ownership over a piece of creative work. It is quite different from physical art, where anyone could purchase a print. However, the original can only be owned by one person. So, why should you invest in NFTs?
Due to their enormous popularity, NFTs are widely purchased and traded by various digital communities. Like with any investment, NFTs are a relatively safe way to make money. The return is based on both the asset’s lifetime and the creator’s luck.
Can NFTs go bad?
One thing for certain is that NFT’s growing popularity shows no signs of slowing down. But NFTs run speculatively; they could rise or fall at any time.
Bit rot is one thing that could cause NFTs to fall in value. Image quality deteriorates, file formats might not open, websites crash, and users forget their wallet passwords. Bit rot, also known as data decay, or data rot, is a continuing problem in IT. Bit rot occurs when storage mediums or processing hardware becomes faulty due to age and degradation.
When there is a high demand for a limited supply, prices tend to increase. On the other hand, if supply increases and demand decreases, the NFT values will lower, meaning that NFT prices are likely to drop.
A blockchain is simply a decentralised way to trade on a computer network. When a buyer purchases an NFT, they will get a record of an item most often held in a separate location.
A Google Doc is a straightforward example of understanding blockchain technology. When making and sharing a document with a group of people, it is shared rather than copied or transferred. This is the decentralised distribution network in which everyone has equal access to the document. Furthermore, all changes to the document are logged in real-time.
Should the third party source go out of business, there would be issues with accessing any NFTs. An example of a third-party source is an NFT marketplace such as OpenSea. Major issues could also happen should the file be altered or deleted.
NFTs and innovation for the future
New sorts of NFTs and digital assets are developing at an incredible rate. High on the NFT radar is music, which allows the original musician to keep nearly all profit made from the sale. This is why so many are opting to start selling their music as NFTs.
Video games are another frontier in the world of NFTs. For example, if a rare Fortnite skin was made available as an NFT, a player might be the first to unlock it in-game and would then be able to claim ownership of the skin. The token for that skin can be auctioned to the highest bidder. Regardless of the price the skin sells for, Epic Games will get a portion of the profits. The cycle could be repeated indefinitely, with Epic Games retaining a portion of the proceeds each time.
Investing in NFTs is a fun way to diversify your portfolio and make money relatively easily. With many forms of NFTs to choose from, you do not have to stick to just investing in digital art. You could dive into music, memes, real estate and gaming! It is an exciting world to explore and very easy to get started. With the future of NFTs looking bright, now is the time to add another source of income to your life.