Should NFTs be used as currency?

It is unequivocal to say that worldwide, non-fungible tokens (NFTs) are grabbing attention. The advantages they offer over conventional cryptocurrencies have helped them to carve out a niche. However, although they have experienced substantial growth, a large section of our society is still apprehensive regarding their success. Due to this reason, people have the following doubts.

• Are NFTs a real opportunity for prospective investors?
•  Do they possess actual value? 
• Or are they in the process of fading away, like so many past trends?

What Is an NFT?

NFTs are digital assets that are wholly unique. Each one possesses identifying information that makes it distinct from others. That means their swapping or trading like physical money or other forms of currency is not at all possible, as no two NFTs are identical.

 The storage of NFTs takes place on the Ethereum blockchain, and other blockchains have no linkage to their content. Therefore, this feature empowers their owners to prove that they are the legitimate owners of their works. 

Understanding the concept of NFTs is a cumbersome process; it’s a method to have and prove your claim on a digital work or file. Since every NFT has its unique attribute, it occupies a perceived value. 

Due to this reason, they are termed “non-fungible” tokens. 

We use the Fungible word for those things which do not have a replacement. On the other hand, the rest of the currencies have their replacement with another piece of the same value, while NFTs are unique.

Another integral part of the concept of NFTs is that they can only be owned by one individual or entity at a time — and sharing is impossible. 

What Are They Used for?

 The application of NFTs is possible on many products, including physical or digital and concrete or non-concrete.

 Some of the notable examples include:

• The artwork comprises various drawings, paintings, prints, digital graphics and pictures.
• Artefacts
• Digital avatars
• Domain monikers
• Gaming products
• GIFs and clips
• Physical products
• Songs and Tunes
• Houses, Flats and Villas
• Tickets for famous events
• Visual content
• Written content — such as Tweets and memories

The best definition of NFTs is that they have the potential to be a placeholder for people’s identities and intellectual property rights.

How Do NFTs Differ from “Traditional” Cryptocurrency?

Differentiating NFTs from physical currency, such as dollar bills and coins, is an easy task. However, they more or less don’t look different from cryptocurrencies like Bitcoin. And it is a gospel truth that they share some eerie similarities. To exemplify, both use the blockchain, removing the intermediaries, which helps perform the transactions efficiently. Blockchain also keeps a record of all the transactions.

However, this is fundamentally the end of the overrunning characteristics betwixt NFTs and cryptocurrencies such as  Bitcoin and Ethereum. 

The striking feature of NFTs is that they are non-fungible; on the other hand, other cryptos are fungible, which means their trade with other items of the same value is possible. We cannot copy, paste or replace NFTs because each contains a distinctive digital signature, differentiating it from all others. 

How Do You Buy NFTs?

We can buy NFTs through numerous NFT marketplaces, like OpenSea. Moreover, some marketplaces have carved out a niche in selling certain assets, such as artwork. While Ethereum is the most renowned one specializing in tokens, there is no shortage of other options.

For buying NFTs, the prospective investor must possess a crypto or digital wallet. The buyer needs to use platforms such as Coinbase to finish the purchase before transferring it into her purse, which is joined to the marketplace, to save the investment. More renowned and reliable platforms, such as PayPal, are also in the process of getting into the game.

Since usual fees are associated with NFT purchases, the buyer must carefully research the shortlisted options before purchasing. On the sale of an NFT, The originator can also receive a part of the earnings.

It’s necessary to be aware of scams and tricksters dealing with NFT purchases and exchanges — these do have a presence. So, it is prudent to indulge in your due diligence before investing in NFTs.

So, Are NFTs the Future of Currency?

When cryptocurrency first made inroads, publicized by the growth and introduction of Bitcoin in 2009, it was termed the future of the financial services sector that would bring a paradigm shift in how we use money and exchange goods. But we’ve witnessed Bitcoin and other cryptocurrencies go through purple and lean patches in just over ten years since their inception.

NFTs are a recent phenomenon; however, since last year, when they became renowned, they have experienced tipsy-turvy situations in popularity. So, in the future, NFTs may experience doldrums.

That said, NFTs offer unparalleled chances for numerous professionals, including artists and musicians, to receive adequate rewards for their tasks, widening how they monetize their products and services adroitly. 

Despite beaucoup advantages, people consider NFTs remain highly controversial. There is no denying this conviction that due to the absence of standard regulation thus far, their value — or perceived value — could alter frequently. As a result, a few people, including those who have shown immense interest in other forms of crypto, think NFTs are not a serious investment. And as we have observed, there are umpteen risks in buying and selling NFTs, with imposters always on the prowl. 

So, if NFTs follow the impressive growth trajectory and become more mainstream, it’s vivid that we’ll need higher oversight and enhanced education coupled with stringent yardsticks. But, with the government’s and public’s unabated support, NFTs could revolutionize how we use the currency.