Every technology comes with its pros and cones. In the crypto and blockchain space, NFT is the latest trend which is growing very fast. NFT is the abbreviation of Non-Fungible Token. NFTs are digital assets and recorded on blockchain, which makes any NFT a unique asset. Just like any crypto asset, it can be traded and can be transferred from one owner to another. Creating NFT is far easier than crypto, and anybody can convert its digital asset in NFT without any technical knowledge of coding.
NFT is becoming popular among crypto enthusiast and crypto investors due to its unprecedented properties, but at the same time it has many disadvantages also. Here we will discuss advantages and disadvantages of NFT.
Advantages of NFTs
After the internet revolution, digital asset came into exist and as today everything is going digital and online the digital asset has become an essential part of our life. Even some type of physical asst can be converted into digital asset. But here disadvantage of digital asset is that it can be copied easily, so it is difficult to establish ownership of any digital asset. Here the role of NFT comes, If any digital asset converted into NFT that can not be duplicated because that is recorded on blockchain and once recorded can't be change ever. All record of transaction and change of ownership is also available on blockchain forever.
Some real world application of NFTs can be in real state field where land ownership can be recorded on blockchain. In education field if degrees of university is converted into NFT it will be impossible to generate duplicate degree certificate for anybody.
In blockchain gaming, NFTs are becoming popular. On Hive blockchain some card games like Splinterlands, dCity etc are becoming popular day by day. These games are based on NFT.
Disadvantages of NFTs
As NFTs are digital asset, so there are some limitations of it. Physical assets like, physical art work, painting, sculptures etc can't convert into NFT.
NFTs are prone to hack similar to other crypto assets. If owner forgot the key, NFT can't be access any more, and it could be a complete loss of NFT owner. NFTs are highly volatile asset and their price are based on speculation rather than any real world use. So it could be a high risk investment.
Anybody can create their NFT and set the ask price in the market without any base. Most of the time, investor buy it because he/she likes that, but it is not necessary that in future anybody will buy that in same or higher price. Thus, it could be a dead investment.
Conclusion
Right now, NFTs are at its initial phase. To increase its utility real world assets are need to be tokenized and as its utility in real world application will increase it can be a next revolution.