There are plenty of myths regarding NFT that are pretty harmful and misleading, here are the top 10 of them
Non-fungible tokens are unique digital assets addressing certifiable things, for example, photographs, music, videos, and trading cards. NFTs are managed in a digital ledger and traded on the web. For instance, rather than buying a genuine photo to show on a divider, the purchaser gets a unique digital file. Nearly any digital asset, for example, a piece of collectible advanced characters, virtual land, or unique online media posts, can be made and bought as an NFT. This article lists the top 10 myths regarding NFT that we still believe in 2022.
NFTs are a Type of Cryptocurrency
There is a misconception that NFTs are a kind of cryptocurrency. The similarity between cryptocurrency and NFTs is that they are both based on blockchain technology. However, the key difference between these conceptions is fungibility. A fungible item can be replaced by an identical item at the same value, for example, an ETH can be exchanged with one ETH. In contrast, a non-fungible item has a unique value and cannot be replaced for another item with equal value.
Complicated Nature of NFT
All the nature of buying, collecting, and storing of NFTs might sound too complicated at first glance but that’s not the case. The value of collectibles in NFT depends on factors like quality, authorship, uniqueness, scarcity, and cultural relevance. New technology is generally hard to use at the beginning but over time it will be just like some app running in the background of the phone smoothly even if you don’t pay heed to the technical aspects. It will be so easy that a kid can also enjoy NFT in the coming future.
NFTs are a Get-Rich-Quick Scheme
Some people are dead set on labeling all NFTs as scams, while others are proclaiming it as the future of all forms of art. In truth, NFTs are neither of the two, as the concept of owning and selling limited edition copies of work has existed for centuries. NFTs are often limited and unique creations, which explains why they are valuable and well sought-after. Investors have had their fair share of investment successes and failures, as well as experiences of fraud. Criminals can hack into an account and resell under someone else’s name.
NFTs are of No Use:
It is undenying fact that NFTs saw the dawn of success after a while when they triumphed in achieving the trust of many. The slow rise might be a reason behind the traditional art world’s misunderstanding of NFTs. Today many legendary artists are exploring NFT. NFT has also encouraged the traditional painters to explore this digital wonder, who otherwise preferred canvas and paintbrush normally. E.g. the Centre Pompidou of Paris is known for digital art exhibitions.
NFTs are Bad for the Environment
Since NFTs are sold on these blockchains you would think this makes them bad for the environment, but this isn’t the case. Ethereum, where most NFTs are sold, is moving away from a Proof-of-Work model in favor of Proof-of-Stake, which is a less energy-intensive process. Not only that but most of the cryptocurrencies’ energy sources are also sourced from renewable energy sources, making them greener than once thought.
NFTs Top in Money Laundering
It is a widespread misconception that cryptocurrencies are for criminals and tax defaulters. Cash is much more crime-driven than crypto. Every information put in Blockchain is completely transparent and the slightest amount of scam is easily traceable. Moreover, it’s easy to track wallet addresses and recover stolen funds in cases of mishaps. Fiat money crime is much larger than crypto crime.
NFTs are Imaginary
NFTs are ImaginaryMany consider NFTs somewhat elusive and therefore as a not excellent platform to invest in because of their inability to be exchanged into physical money. However, usage of NFTs differs from person to person; some like to store them, and some play around with them. At the same time, the scarcity factor in this scenario boosts NFT’s worth by the extensive period for purchase.
NFTs Are Not Secure Nor Transparent
Musician Grimes has sold numerous digital artworks built on NFT technology, earning a total of $6 million. However, the buyers who bought his NFTs do not own the artworks themselves, which means they can be seen and downloaded online. As such, NFT technology seems not to be secure nor transparent for NFT owners. However, each NFT is identified by a unique serial number which is generated via blockchain, hence, it cannot be exchanged. That’s why they are called non-fungible tokens. By that, saving an NFT doesn’t make you its owners, but the one who owns the token in their wallet.
NFT Resale Rights Undermine Value
NFTs have many potential uses, but the earliest adoption has been in digital art. The main economic benefit to artists is not just an easy way to sell their art but a widely accepted royalty system in which the original artist receives a commission every time the artwork is resold. It represents the ongoing investment the artist is making by continuing to produce and promote their work.
NFTs Have Zero Utility and Are Worthless
An NFT’s true utility comes from its underlying blockchain technology that enables the ownership, transparency, and security of digital assets. Furthermore, an NFT’s true value lies in its provenance.
The current uses for NFTs have sparked discussions questioning the utility and value of NFTs–more specifically in regards to digital artwork, avatars, and collectibles. When the majority of people think about NFTs, they think of aesthetically strange digital avatars used as profile photos on social media profiles or meme art pieces being sold for millions of dollars. However, even NFT art and avatars show the potential utility and value of NFTs.