Name: NFTs Are a Scam / NFTs are the Future
Rating: 3.9 (20 reviews)
Author: Bobby Hundreds

What’s in it for me? The inside story on NFTs.

Every year, Collins Dictionary compiles a list of words and phrases considered contenders for “word of the year.” In 2021, some of the words that appeared on the shortlist were “double-vaxxed,” “hybrid working,” and “climate anxiety.” But the word of the year was an easy choice. It went to three little letters that seemed to be on everyone’s lips – “NFT,” or non-fungible token.

That year, over $40 billion worth of crypto transactions were recorded. The artist Beeple broke records with his digital collage “Everydays – The First Five Thousand Days” selling for over $69 million at an art auction. And in the space of three months, NFT trading increased 700 percent.

By 2022, the crypto slump left the market for NFTs looking far less robust. And yet creators and collectors of these digital assets continue to proclaim that NFTs are revolutionizing the ways we create, invest, and interact online.

So, what’s the real story? Are NFTs a fad? A fraud? The future? Let’s find out.

WTF are NFTs?

Before we dive in, here’s a quick rundown of everything you need to know if you’re new to the weird, wild world of NFTs.

To start, what the heck is a non-fungible token anyway?

Put simply, it’s a certificate confirming that you’re the sole owner of a digital asset. That digital asset can be one of many different things – a piece of original art, a collectible trading card, an investment that behaves like a stock, or a membership card that lets you accrue loyalty points or gives you access to an exclusive club, to name just a few.

Often, an NFT will perform more than one of these functions. For instance, have you heard of those Bored Ape NFTs that every second celebrity seems to be purchasing these days? They’re unique works of digital art that also grant their owners access to an exclusive digital space called the Yacht Club.

So … a receipt? Is that really all an NFT is? Well, yes. The easiest way to think about it is like a proof of purchase, which is securely stored on the blockchain. OK. And what’s that again?

Blockchain is a data storage system, where data is stored in so-called blocks – kind of like the cells in an Excel spreadsheet. These blocks are encrypted and linked together in a huge database that’s totally decentralized and spread across multiple networks. This means it can’t be tampered with – someone trying to change any data in one location would immediately be detected by all the other networks that store that same data. Because all the transactions are encrypted, they remain anonymous. But the blockchain itself is transparent, so individual transactions can be easily traced.

And all of this has to do with something called the metaverse, right?

The metaverse – not to be confused with Facebook’s Meta venture – is a version of the internet augmented by virtual reality tools. People can access and interact in virtual worlds, including selling and purchasing goods like NFTs. A lot of experts think the metaverse, which is still in its nascency, will become the next big revolution in digital technology.

So. Can I buy an NFT?

Sure! But not with cold, hard cash. You’ll need a form of cryptocurrency, like Bitcoin or Ethereum. NFTs are typically released through their creator’s web platforms, and they tend to sell out quickly. There’s also a booming secondary sales market on auction sites like OpenSea.

And are NFTs a secure investment?

Nope! In the few short years NFTs have been around, the market for these assets has proven volatile, a number of high-profile creators have already withdrawn from the scene, and a number of scams around the buying and selling of NFTs have been reported.

But this doesn’t mean investing in the digital assets you love or value won’t pay off big-time in the end. It’s still early days for NFTs – the risks are high, and so are the rewards.

Are NFTs a scam?

Lots of people are skeptical about NFTs. And they have good reason to be.

To begin with, NFTs are sketchy by association. They’re traded using cryptocurrencies, which are notoriously unregulated, scam-prone, and volatile. Like many new industries before it – from gold mining to the dotcom boom – crypto offers opportunities to get very rich, very fast.

Are NFTs a revolution?

Guess what? You’re a digital artist.

You might not think of yourself as such – but if you’ve ever posted to Facebook, composed a witty tweet, uploaded a picture of a sunset to Instagram, or filmed yourself doing a TikTok dance, then that’s exactly what you are.

Are NFTs the future?

Whether you’re just learning about NFTs, considering investing, or have already amassed an enviable collection, you probably want to know the answer to one key question: Are NFTs here to stay?

No one knows what the future is for NFTs – things can change quickly, especially in the digital space. Trends come and go. New platforms, functions, and communities appear as if out of nowhere and can evaporate just as quickly. But sometimes, that far-fetched, hard-to-grasp new thing turns out to be both revolutionary and long-lived. Think email, social media, and the internet itself.