Pros and Cons of Investing in NFTs

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2 years ago
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Whether you’re an investor, a gamer, or an artist, everyone is looking forward to investing in NFTs. But it has pros and cons, just like any other technology. Here are some pros and cons of NFT you should know before you think about investing in them

Pros of Investing In NFTs

  1. Anyone can invest in NFTs

  • Everyone has access to making investments in tokenized assets

  • When assets are tokenized into an NFT, ownership may be transferred between individuals more effectively and easily from one place to another

2. NFT ownership is secured by a blockchain

  • The digital representation of ownership through blockchain technology can increase the security of an investor’s ownership of a given item

  • Blockchain technology can increase asset ownership transparency

3. It’s an opportunity to learn more about blockchain technology

  • By investing a small amount in tokenized assets, investors can diversify their portfolios and increase their understanding of blockchain technology

Cons of Investing In NFTs

  1. NFTs are not an asset class

  • NFTs are frequently — and mistakenly — viewed as an asset class as opposed to a technology method of indicating ownership

  • The enthusiasm and general misunderstanding around NFTs might lead to inflated and unstable tokenized asset valuations

2. NFT generation is highly energy-intensive

  • The Ethereum blockchain, which employs the energy-intensive operational protocol known as proof of work, now supports the majority of NFTs

  • The amount of electricity used by one NFT transaction is equivalent to that used by the typical home for around two days

3. You may need to own Ether (ETH)

  • Since the majority of NFT sales take place on the Ethereum platform, possessing Ether (ETH), the cryptocurrency used by the blockchain, is frequently required in order to buy an NFT

  • Investors may have few options if they want to purchase NFTs using fiat currency like the dollar

REFERENCE:

  1. https://www.investopedia.com/pros-and-cons-of-investing-in-nfts-5220290

DISCLOSURE:

None of these articles constitutes financial advice. Articles are highly summarised to make it easy for the reader and save your time, so please DYOR further before putting your hard-earned money into any product mentioned.

Please note that the tech industry evolves rapidly and the info in this article is correct at the time of publishing. As Heraclitus said, “Change is the only constant,” so if anything sounds old or off, please holler on the socials or comment here so everyone stays peeled.

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