Misconceptions about the NFTs

xuanling11
Coinmonks
Published in
3 min readAug 18, 2022

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Photo by Tim Mossholder on Unsplash

When you hear about NFTs, you immediately feel they will make you rich overnight.

At least NFTs sold in 2021 was crazy.

Why do people own NFTs?

There are many reasons, but four major ones stand out:

✅ to access exclusive perks

✅ to profit

✅ to preserve the value

✅ to secure digital ownership and rights

But, it does not explain what I owned when I purchased the NFTs.

You are correct, and that is the beauty of owning an NFT! It is a very blur boundary between owning and having.

So what do you actually own?

A JPEGs

Even though people believe that NFTs are Non-fungible Tokens that cannot be replicated through code, the artwork that the code carries on can be duplicated.

You own a string of code despite an immutable digital signature on it.

That does not change the fact the artwork can still be replicated on the internet.

A Smart Contract Ponzi Scheme

To become a smart contract Ponzi Scheme, you need to satisfy 4 conditions:

1️⃣ the contract distributes money among the investors

2️⃣ the contract receives money only from investors

3️⃣ each investor makes a profit if enough investors invest enough money

4️⃣ the new investors join the contract, the greater the risk of losing investments

It is clear that conditions 1 and 2 are easily met because the NFTs are running through a smart contract within the blockchain that is narrow to only people who control their own wallets.

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