When I first joined the crypto space all I knew about were tokens, coins , exchanges,smart contracts and DeFi. Then all of a sudden I started hearing about Nfts everywhere. Next thing I knew, various stories of people selling images, gifs, and random digital assets were circulating all around the internet. The Nft craze began and this lead me to ask the question
What Is an Nft?
Nft is short for Non Fungible Tokens. The term Fungible stands for replaceable, or Interchangeable. So a Non Fungible Token is a token that's not interchangeable, in other words Unique from others.
Nft is basically digital art. When you buy an Nft you're buying the rights to that image, video, or whatever it is. So I thought, as that's what's told, but then after doing some research I realized that what you're actually buying is just a link to a server where the asset is located.
The Advantages of NFT
The rise of NFTs brought a lot of attention to the crypto space, especially from those who were into art and collectibles. Nfts were a gateway for many artists and art lovers to get into the crypto space and generate money for themselves by flipping Nfts.
Another thing about Nfts that makes them so nice, is that anyone can invest in Ntfs. There are a lot of people who don't invest in Physical Artwork because it takes some effort to go to art galleries, and a little hassle before one can buy. With Nfts the process is a lot easier and faster as all you have to do is have enough crypto to buy and you'll receive your asset in minutes.
I once read a tweet where an artist said one of their artworks went missing after an exhibition, now something like that can't happen with Nfts, and even if it happened, one would still be able to see the address where the Nft is located as the transaction history is on the blockchain.
The Disadvantages of NFTs
Like all things Nfts also have Disadvantages. The first one being the fact that you simply own a link to an image on a server. You don't own the server, and over time it's possible for things on the server to change, your Nft included.
Another thing about Nfts is it actually kills art. Usually artists spend a lot of their time painting or drawing beautiful one of a kind pieces, but with some Nfts there's just someone who sits down in front of a computer and creates a thousand unique images with just one or two features different [red hair, blue hair type of differences] in each piece, then he has various influencers endorse the Nft and they sell them for outrageous prices. A lot of big corporations are launching Nfts just to join the trend and use their popularity to make some money.
Then there's also the fact that a lot of NFTs have no use case. Other than having something unique, a lot of people will value an Nft more if it has a real world use. Sadly only a few at the time actually have that.
As for me, I'm not really into Nfts, the cons are enough of a deterrent for me. Especially the fact that a lot of them don't have use case. The only time I can invest in an Nft is if it's the first of its kind, it's rare, has real world benefits, and was probably owned by someone famous before. An Nft like that will definitely be worth a lot.
At the moment a lot of people are still invested in Nfts but I have a feeling sooner or later, the useless and overpriced ones will no longer be desired and die off (A large portion of all Nfts), and those with real value will stay.
In the end it's safe to say Nfts are still in the early stages and may still grow up to be a major part in crypto.