Would you like to be the digital owner of some collectible or, on the contrary, be the author of something that can only be produced in the digital world and exposed on the internet? Have you considered being a crypto artist? Do you know the world of tokens, also called NFTs? What are they and why have they grown so much in such a short time?
From Finances for Mortals we help you to enter that world that digital natives are so passionate about, especially the youngest.
Since they are difficult to understand, mintersbay.com advises that you educate yourself on them, seek counsel, and then base your selections on that information.
What are NFTs?
NFTs or non-fungible tokens ( Non Fungible Token ) are representations of assets, both digital and physical, on the blockchain network. They use the same technology as cryptocurrencies, but unlike cryptocurrencies, they cannot be divided or exchanged with each other, but can be bought and sold.
The NFT acts as the cryptocurrency unit of value of a digital asset stored on a blockchain. In other words, it is a kind of certificate of authenticity that allows identifying the ownership of a virtual or physical asset, but whose authentication is registered through the blockchain methodology. They are non-fungible, unique, exclusive and easily verified assets.
Any of us can “tokenize” our work to sell it as NFTs, which are archived in a registry that is impossible to falsify because it is stored in countless computers around the world, connected through blockchains. The difficult thing will be for someone to buy it from us and for the value to be maintained over time.Visit www.mintersbay.com.
Why have they grown so much in such a short time?
NFTs emerged years ago on Ethereum, a digital platform based on blockchain technology, but their rise is very recent. The underlying concept is similar to the investor’s interest in works of art and/or other collectibles, such as: (stamps, photos, letters, etc…), which throughout history have been transmitted through the world of auctions, and where so important is the way of authenticating the pieces that are transmitted.
In the digital world, the NFT acts as a digital “voucher”, but it is difficult to falsify due to the technology it uses. This allows proving the ownership of digital assets and, therefore, generating a market via the internet, in which any asset can be traded.
The fever for NFTs has exploded in 2021, the year in which all price records have been broken for the sale of these digital works in a global NFT market in cryptocurrencies that moved almost 27,000 million dollars, according to published data.
NFTs have limits
The popularity of NTFs and the entire universe/metaverse of digital assets, such as cryptocurrencies or virtual reality, is an undeniable fact. It is also understandable that the youngest are comfortable in this virtual world in which they were born and that they themselves are developing. The financial prosperity that it is generating and the frontiers that it has destroyed in the generation of value are probably not questionable.
But it is also true that this increase in popularity gives a lot of room for opportunists who want to develop possible uses for fraudulent purposes. Fears are growing among regulators and investors that the “crypto” phenomenon will become a haven for cybercrime.
Money laundering and fraud are also paths deviated from legality that must be tackled, if possible by regulation (very difficult in terms of time and deadline), but they are also warning signs for investors, who distrust this type of investment. What are the limits of property rights? How to limit the legislation in this regard? Is everything fair in the digital world?
Do we know the risks? Path for fraudulent activities?
From an investor’s perspective, when entering these large marketplaces, we must make sure that we at least understand what we are buying and selling. Basic elements such as taking care of the privacy of information, operating on well-known platforms, verifying bidding histories, even not letting more or less well-known influencers or influencer simulators be carried away, are small steps that we take care of in the rest of our financial operations… and here it cannot be less. Cryptocurrency scams are nothing new, so in NTF the path can be very similar.
The NTF market did not exist even a couple of years ago, so it requires a whole process of maturation and consolidation ahead. They do not even have a definitive financial classification, so being alert to their evolution in regulatory and market matters is also a way of not losing interest for those who feel attracted.
Financial education is also necessary to inform the public and regulators about the risks that this activity entails.
This is a concern that also affects the main crypto asset companies, legal platforms that are aware of the advance of crypto fraud and are investing large amounts of money to demonstrate the integrity of their business, and thereby attract the most suspicious investors. Safe and happy customer, it is a guarantee of improvement in the market.