While NFTs have only been around for less than a decade, it’s already boomed in popularity and sales, especially in recent years. Earth Web reports NFT sales2020: $250 million, with $10-20 million per week in NFT sales.
Because it’s relatively new, the NFT market may be a little complicated to newcomers, and myths are often spread around. In this article, we’re debunking some common misconceptions about NFTs.
What are NFTs and how do they work?
The term NFT stands for “non-fungible token”, and essentially means that it’s unique and irreplaceable. Wealthsimple’s brief explainer on cryptocurrenciesHighlights that bitcoin can be traded for other bitcoins of the same object.
The same can’t be said for NFTs, as they act more like a one-of-a-kind collector’s item. These unique assets can include anything from music to website domains, and are available for sale on digital auction houses and online marketplaces.
The current trend centers around digital art, similar to fine arts collecting. Most of the hype surrounding NFTs quickly turns into misinformation and myths.
“NFTs are just a fad”
Because it’s now garnered mainstream attention, it’s been observed to challenge traditional notions of the value of art. Many people see NFTs solely as a novelty — this cannot be more false. Digital art is a well-established medium for creative expression. Many digital exhibitions are held in different parts of the globe.
NFTs actually helped to create a way for artists and musicians to monetize the art. For example: contemporary artist Harif GuzmanBlockparty allowed him to convert some of his old works into NFTs, and earn through the platform. Guzman, as well as lesser-known artists, have been able use this platform to expand their media and assets.
“NFTs are a get-rich-quick scheme”
Some are determined to label all NFTs frauds while others proclaim it the future of all art forms. NFTs are not both, since the idea of selling and owning limited edition copies has been around for centuries.
NFTs can be rare and exclusive creations which is why they’re so valuable and sought-after. Investors have seen their share of success stories and failures as well as fraud. Criminals can hack into an account and resell under someone else’s name.
This method is called “sleepminting” and was used to sell a fake copy of Beeple’s $69-million piece. This is just one of thousands of successful transactions. The NFT market has proven to be a reliable place for investors, dealers, and art creators.
“NFTs are bad for the environment“
If you’re an avid crypto enthusiast, you’re probably already familiar with the various environmental implications the technology inflicts. The Ethereum blockchain consumes considerable power so many are concerned that crypto art may also prove to be an environmental burden.
According to research, NFTs only represent 2% Gas fees for EthereumSome NFTs can be supported by other blockchains like FLOW, WAX and TEZOS which are less taxing on the environment. Ethereum is also moving from a proof of work model to a Proof-of-stake model in order to reduce energy consumption.
As we move forward into the future of art and technology, it’s certain that NFTs will continue to play a central role. Read our article to learn more about NFTs. article on “Who framed the NFT market?”We will explore the reasons why NFTs have a bad reputation and how the ecosystem can still thrive despite it.
If you prefer, you can visit our latest website. Q3 NFT reportFor more information about the NFT market, click here