If you've heard about Non-fungible Tokens (NFTs), it's possible you've thought about investing into it. Many online games now reward players in NFTs and the hype makes one wonder if it is worth investing into as an asset. It could be misleading for starters, as one might not differentiate it from an asset class. NFTs use Blockchain technology to digitally signify ownership , thus, it's important to have a good knowledge about it before diving into investing in them. One advantage of NFTs is that everyone can invest into it, you don't need to be a veteran in the crypto space to buy and sell NFTs. Most investors will prefer to invest in NFTs for the simple fact that it can be transferred among people anywhere in the world.
The use of Blockchain technology to digitally signify ownership of NFTs makes it secure. Investors wouldn't have to worry about trust and hackers as one's assets are backed up by password and passphrases. NFTs also open an avenue for beginners to learn about cryptocurrency or the Blockchain technology. There's much in this information age to learn, NFTs can open the door of learning about Blockchain technology to many. I had always wondered what NFTs are and cryptocurrency in general but gradually, with a careful study of the chain, I'm beginning to understand how the Blockchain technology works. There are a few people who invested into NFTs just to learn about Blockchain technology.
Whatever has an advantage has its cons. It's a bad idea to invest into any asset just because it's being tokenized. The first cons of NFTs is that they're not an asset class, they're just a technological way of indicating ownership. The current hype about NFTs could affect the token in general to be inflated and volatile. Buying of NFTs may have limited options as most sales are done on the Ethereum platform. This means owning an Ethereum may be required in order to buy NFTs. This will bring limitations in NFTs transactions. NFTs being supported in the Ethereum platform will not only require Ethereum for the purchase of NFTs but will require a high energy for the generation of one NFT that's because the platform uses the protocol proof of work which is high energy intensive.
In conclusion, NFT has its pros and cons. However, it's important to do your findings and have much information about the token before investing into it.