Have you ever thought about the pros and cons of investing in popular Non-Fungible tokens nowadays? Is it a good idea or not to purchase a particular NFT? What are the reasons for and against it?
So many questions are bothering crypto enthusiasts who have been drawn into the fantastic world of these non-interchangeable units of data. However, let’s find out what NFTs represent in the first place before we proceed to its pros and cons, shall we?
NFTs briefly explained
First of all, newbies in this industry should know some basic things regarding Non Fungible Tokens. As mentioned before, NFTs represent non-interchangeable units of data stored on Blockchain technology, a specific type of digital ledger that can both be sold or traded.
Non-Fungible Token ledgers claim to enable two crucial things> a proof of ownership and a public certificate of authenticity. To filter NFTs by average price, total sales volume, owner count, and top collections, investors are primarily using rarity tools in 2022.
However, one question remains among the potential NFT investors: “Is it worth investing in these Non-Fungible Tokens or not?” To answer this question, it is best to provide you with pros and cons and leave it up to you to decide! Let’s start with the pros!
Pros of investing in NFTs
We’d like to present you with the top three pros of investing in NFTs that may affect your decision:
- There is an excellent opportunity to learn more about blockchain in general. Investors can gather all the possible knowledge of blockchain. At the same time, they can diversify their portfolios by assigning a small amount to tokenized assets.
- NFT ownership is secured by Blockchain technology. Using this remarkable technology, people can signify ownership digitally, making ownership of an asset much more secure. In addition to that, Blockchain tech is able to enable ownership of assets more public.
- Anyone in the world can invest in Non-Fungible Tokens. It is accessible to anyone globally to invest in tokenized assets. If you are considering buying NFTs in India, click here. Keep in mind that confident asset ownership tokenized into an NFT can be transferred among people anywhere on the planet more easily.
Cons of investing in NFTs
On the other hand, some people still doubt whether they should invest in NFTs for their numerous cons. Some of the top three cons of investing in NFTs are:
- There is a necessity to own Ether. Since most Non-Fungible Token sales are happening on the Ethereum platform, it is necessary to own Ether (ETH) which is its native currency. People need to own Ether to buy NFTs. Even though it’s possible to buy an NFT with fiat money, there are certain limitations.
- NFTs are not asset classes. Instead of a technological way to indicate ownership, NFTs are erroneously regarded as an asset class. It is general misinformation regarding NFTs that can cause the values of tokenized assets to be volatile and inflated.
- A generation of NFT is massively energy-intensive. Since a great majority of NFTs are supported by Ethereum that uses proof-of-work, a single NFT transaction demands as much electricity as the average household for about 1.5 days.
A universal answer to “Whether you should invest in NFTs or not” does not exist. We’ve presented you with the pros and cons of investing in Non-Fungible Tokens. It is up to you to do deep research before making your decision.
Keep in mind that the total amount of NFT sales rapidly increases from one year to another. Thus, there is a great potential for investors to make profits! Good luck!