Do You Need to Take Action and Empower Your Net Worth With NFT Coins?
NFTs offer the potential for digital and real-world assets trusted authentication, in contrast to many other traditional verification forms.
With crypto gaining tremendous momentum, it’s no wonder creators are looking for new and innovative ways to digitize the old systems of value — one of those new systems in an NFT.
NFTs are non-fungible tokens, and each NFT token is unique and different from the next. NFTs are a new form of cryptocurrency that offers a way to own digital property truly, whether its assets (such as in games), land, or other scarce items. NFTs can be traded and sold on third-party marketplaces, which means NFT holders can earn money by trading NFTs with other NFT holders.
Since NFTs are unique, they aren’t interchangeable (fungible). So, you can’t trade NFTs one for one because each one has a different value. For example, if you owned an NFT for digital art, its value could be $2000. In addition, you could own NFTs in a video game, and their value could be $10 per NFT. So, these NFTs can’t be traded equally, whereas all Bitcoins have the same value as they aren’t unique.
In this article, we’ll look at various examples of NFTs, how you can add them to your portfolio, and answer some pressing questions regarding their value.
Examples of NFTs
Given that an NFT isn’t hackable, it offers an attractive way to place a unique identifier pegged to an object. And the thing need not be physical — for instance, digital artwork.
Digital art is the first and most intuitive use for NFTs. We all know how easy it is to copy an image over and over. And there’s no way to know which one is the original. The fact of the first created image, besides taking a photograph, being identifiable is ridiculous. However, with NFTs, now there can be an original. How does it work?
An NFT gives the user the ability to assign or claim ownership of digital data they purchase. The transaction is created using smart contracts and forms a new block in the Ethereum blockchain. The metadata stored in the block is tied to the Ethereum address used to purchase it. Thus, there can only ever be one owner at a time of the digital item. It’s a closed system of ownership previously not available until the emergence of blockchain tech.
So, why can’t I copy the art and give it away? Who’s going to know? NFTs have a feature called Ethereum address metadata. NFTs are tied to the owner’s Ethereum address, and their NFT is stored in an NFT Registry. So, if you were to copy the NFT and give it to someone, they couldn’t claim it because they don’t own the original NFT registry entry.
However, there is a problem with art that isn’t watermarked and is already out there on the web. There isn’t anything stopping a person from taking artwork and placing an NFT on it then claiming it is theirs, leading to some sticky situations. The lesson when buying digital art pegged to an NFT is to check the website’s TOS so that you can arm yourself with information before purchase. Also, check the artwork has a watermark and store your original in cold storage to avoid bit rot (or file degradation).
What are the benefits of owning NFT digital art? First, you can prove you are the owner. Also, you can set the scarcity of the item. For example, you can record that only 20 copies should ever exist in the block’s metadata. Once again, the challenge is enforcement. Much like with traditional copyright material, someone must police it. Another benefit is you can earn royalties every time someone sells the item. Pretty nice. So, can we use NFTs for things other than digital art? Oh yes.
How about a signature on a legal document backed by an NFT? Most of the benefits you can imagine from our discussion above, but the advantage of proving, without a doubt, no forgery is possible should be valuable. In our endless pursuit to uncover the truth of the particulars of a legal case, how great would it be to take comfort in not needing an expert to verify a signature when you can check the NFT?
Imagine a digitally encrypted non-reproducible itemization of every aspect of a court case? Of course, as humans, we will still question the validity of this or that, but NFTs would make it a lot harder.
Need to buy some land or a new car? Tie the purchase to an NFT by buying it with crypto. Since no one will forge your vehicle or a 10-acre lot, you need not worry about that problem, but imagine how easier it will be to follow the chain of custody on an item like land? Anyone who has bought land will know that you can buy a property that doesn’t have a clear deed. It’s a big headache, but now it doesn’t have to be. Hello NFT.
Retroactive recordkeeping wouldn’t be that hard either. Depending upon the blockchain’s block size, you could store an enormous amount of information in a block. However, what if an incident corrupts the blockchain? Don’t worry. You hold your NFT in your software or hardware wallet. Software wallets reside on an exchange’s or wallet company’s servers, and hardware wallets stay with you. So it’s up to you to store it properly.
NFTs are the new way to authenticate ownership, either digital or real-world. And I highly recommend that if you are serious about crypto and NFTs, get a hardware wallet.
We have briefly touched the surface of NFTs, but I wanted to introduce you to the concept in case you haven’t been. There are so many more possibilities with NFTs. Imagine having one device independent of any system that stores your monetary value, as well as credit scores, work history, etc.? A completely encrypted identifier in your care and control allows you to interact with the entire world instantly.
I’m sure some can imagine the worst in that scenario, but I don’t hold to that line of thinking.
So, do you need to add NFTs to your portfolio? I’m not a financial advisor, but it’s going to depend on your situation and what you’re interested in. At least familiarize yourself with them and consider what NFTs can do for your net worth in our new digital world.
So, will you explore NFTs?
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