by Is Buying NFT Art a Savvy Investment?
You’ve heard about them before, but now they can’t be ignored. With the NFT market growing to $41 billion in 2021, the way we consider asset ownership is changing.
You may ask yourself “should I buy NFT art?” And this is a valuable question. Without the proper knowledge, buying NFT art could prove detrimental.
We’ve got you covered. Continue reading for the pros and cons of investing in NFTs and how you can get in on the ground level.
What Is NFT Art?
Non-fungible tokens (NFTs) are all the rage right now, but what are they? NFTs are digital assets that represent real-world items such as artwork, music, or even video game characters. They give digital ownership to a buyer using blockchain technology.
The digital asset is encoded with a smart contract (Ethereum is the most popular network for creating smart contracts), which embeds into a block on the blockchain. Since these transactions are virtually impossible to alter, your ownership of the NFT is highly secure.
The Benefits of Buying NFT Art
One of the most important benefits of NFTs is their ease of access. When ownership of art is bought digitally, the supply chain simplifies. Artists don’t have to go through agents to sell their work, and transactions go straight from the buyer to the artist without middlemen.
Additionally, Owners of NFT art don’t have to worry about the safety of their purchase. Any transaction a buyer makes on NFT art is encrypted on a decentralized blockchain. No one can come in and change that information, protecting the ownership of that artwork from theft.
The Downsides of Investing in NFT Art
Due to the emerging state of blockchains, investing in NFT art is volatile. While we see exorbitant numbers in the market (some NFT art trades in the millions), it is still difficult to determine where the value comes from. Buying NFT art could spell disaster for your portfolio should you invest incorrectly.
In addition to their volatility, some people are fraudulently reproducing successful NFTs and selling them as copies. With uncertainty in the marketplace, buyers may have a difficult time deciphering the authenticity of the art they are purchasing.
How to Buy NFT Art
The first thing you should do to buy NFT art is open up a cryptocurrency wallet. These contain public and private encrypted keys that protect the ownership of any crypto you own. NFTs rely on cryptocurrency for purchases, so you’ll have to invest some money before you can buy digital art.
With your crypto in your crypto wallet, you can sign up with an NFT marketplace. There are many marketplaces, but to avoid fraudulent purchases, take time to research the ones you’ll use. Using your public key, you can now purchase NFT art.
More Information on Investing in NFT
While buying NFT art may prove volatile, it is worth noting that with the development of blockchain technology, these investments are worth considering. To stay up-to-date on the latest NFT trends, as well as info on new gadgets, software, and apps, check out our Technology section.
