The truth is that the NTF concept itself appears ridiculous. You own a painting, a song, a photograph, or a tweet that is now worth millions of dollars? Many people are likely to question the rationality of this concept. Everything appears out of place. However, you should be aware that NFT was created to function in this manner. NFT rules that artists should be compensated as much as possible for their work because art has traditionally been seen as priceless and a part of human expression. As a result, the decision remains that no amount of money is too much for a work of art. Therefore, no one should be surprised when a photo collage sells for $69 million if it is a representation of an individual’s art.
Notwithstanding, understanding the core principle of Non-fungible tokens may be difficult. It’s all right. Every day, we learn and unlearn new things, which is why this article will debunk all of your misconceptions regarding NFT.
Table of Contents
- NFTs are useless
- NFTs are way too expensive
- NFTs can be pirated
- NFT is Cryptocurrency
- NFTs are very complicated
- NFTs render the concept of art galleries and paintings useless
- What if I lose my NFT collectibles?
- NFTs are restrictive
NFTs are useless
This is one of the most common misconceptions concerning NFTs. People feel there is no utility to NFTs since they are digital art with no tangible properties. Given that you cannot display NFTs at your home or in an art gallery to demonstrate that you love and respect art or that you have money, it is logical to think this way.
Before declaring non-fungible tokens useless, let’s look at how they’re programmed in the first place. When an artist or curator creates a token on the NFT marketplace, the artist’s ownership rights are inscribed in the token. The artist is automatically identified as the token’s owner, and a royalty is encoded in the token, thanks to Blockchain technology.
These royalties are structured in such a way that the artist gets compensated regardless of how many times the token is sold. Let’s say I make $3500 on a painting. I’ve already received payment for my artwork. Because of the royalties inherent in the painting (called token in this example) that I sold, if my buyer sells it again, I will still receive money.
This indicates the token will provide me with more profit returns for a longer length of time. However, that is not the case with real paintings, which can be duplicated and generate no subsequent profit for me. There are many false Mona Lisa paintings in the world, but the technology that safeguards Non-fungible tokens eliminates the potential of token duplication. As you can see, NFTs are extremely beneficial to artists in terms of providing usefulness and maintaining the authenticity of their work.
Let’s take a look at it from the buyer’s perspective. True, the fact that NFTs are digital art prohibits the consumer from having a physical experience with the art they’ve acquired, but that’s from a different perspective. After purchasing a non-fungible token. It is programmed as your own using Blockchain Technology. You can keep it and sell it for a lot of money on any marketplace.
What most people don’t realize is that buying NFTs are investments, similar to buying stocks and shares, but better. You are purchasing a piece of a publicly listed corporation when you purchase shares and stocks. However, with NFTs, ownership rights are transferred to you, some even argue that you can claim ownership of a painting by taking a screenshot of it. NFTs, once again, do not work in this manner. Because Blockchain Technology identifies ownership of NFTs, it is impossible to sell or claim them on any NFT marketplace. This will result in legal repercussions. As you can see, NFTs provide profit to the seller. Allowing you to profit even more than the initial market value.
Fact: Blockchain technology helps secure NFT and ensures that both buyers and sellers earn.
NFTs are way too expensive
NFTs can be bought for as little as a few dollars. It is dependent on the marketplace you visit and the type of art you choose to purchase. Buying art from a celebrity or attempting to get a well-known video or piece of art will undoubtedly be more expensive than purchasing obscure items.
Furthermore, when a token is in higher demand, it will sell for a higher price than one that is in lower demand.
Fact: NFTs are also like goods, they can be cheap and expensive as determined by the market forces of demand and supply
NFTs can be pirated
As previously stated, Blockchain Technology prevents two persons from owning the same coin. When a token is sold, the seller loses ownership of the token and can only be compensated with royalties as compensation for their initial investment.
Fact: NFTs cannot be pirated because Blockchain Technology automatically recognizes ownership rights.
NFT is Cryptocurrency
Because many people are uninterested in cryptocurrency, which is OK, when they hear about investing in NFTs, they become indifferent. Non-fungible tokens are not cryptocurrencies; they just employ the same Blockchain Technology that was used to build cryptocurrencies such as Bitcoin and Ethereum.
This misunderstanding may have been exacerbated by the fact that most NFT payments are made via Ethereum. Yes, NFT marketplaces exclusively accept payments in cryptocurrencies, the majority of which are Ethereum-based, while others utilize their own token-based payment system.
This isn’t the only distinction; NFTs are non-fungible, which implies that each token has its own distinct characteristics and cannot be replaced or copied. Cryptocurrency, on the other hand, is fungible. This means it can be replaced with something of equal or greater worth. 1BTC, for instance, can be swapped for another Cryptocurrency of the same value.
Fact: NFT is not cryptocurrency, it only uses the same Blockchain Technology as cryptocurrency and accepts payments through cryptocurrencies. While it is non-fungible, Cryptocurrency is fungible.
NFTs are very complicated
NFT is not as simple as ABC, but it is far from difficult. It’s straightforward, and the terminology used to describe it supports this claim. When a creator—in this scenario, an artist—creates a token with a simple tap in any marketplace—the site where the “goods” are sold—a non-fungible token is created. The tokens are the “goods” in this case. Buyers that are interested in the token can place a bid and then purchase it. It’s funny, it’s easier than ABC.
Fact: NFTs are not complicated, it involves the simple process of buying and selling.
NFTs render the concept of art galleries and paintings useless
True, NFTs are fantastic competitions for art gallery owners and artists with actual artwork. This is the finest opportunity for artists who own actual artworks to curate their work on NFT marketplaces and make even more money. That way, people can earn even more money and realize the true value of their effort. This does not imply that they will remove their works of art from galleries. It’s a method of profiting from two distinct platforms.
It goes without saying that NFT markets are fierce competitors for art gallery owners, but the truth is that there is no criminal in market rivalry. That, however, is not the point. The truth is that there will always be those who prefer tangible art to digital art. It’s all a matter of personal preference. People’s decisions are not always influenced by trends because they prefer to remain in the “safe trust” of what they already know. Furthermore, some people prefer possessing and displaying actual art versus digital art, which gives them the impression that they are true art collectors.
Fact: NFTs cannot replace physical art outright as their demand is still subjected to consumer’s choice
What if I lose my NFT collectibles?
You are wise if this notion has crossed your mind. However, you should be aware that NFTs were developed using Blockchain Technology for a specific reason. You can’t lose any of your valuables since Blockchain not only records that you possess them, but it also protects them from being lost or stolen.
You cannot lose your NFTs because the same technology was utilized to create Cryptocurrency.
Fact: You cannot lose your NFTs because they are protected by Blockchain Technology
NFTs are restrictive
True, non-fungible tokens are mostly created by artists, but this makes them far from being limited. A non-fungible token can be anything. Tweets, music, games, photographs, and artworks aren’t the only options. Non-fungible tokens are defined by digitized data rather than art, which means a pen might be a non-fungible token!
Fact: Anything can be a Non-fungible token