NFT's future or speculation?
Throughout the last few years, NFTs have followed the rise in value that crypto-currencies have had. With the pandemic bringing the art world to a standstill, artists have seen NFTs as a replacement business model. Moreover, with the emergence of a large number of platforms allowing the purchase of NFT or its creation, the market is becoming more and more accessible. However, NFTs have a number of limitations.
Although digital collectibles are booming, this does not mean that they are a safe investment.Indeed, it should be known that the value of the works can depend on the price of the cryptocurrency that supports it and therefore, more at all with its real quality.
Today, NFTs being much more of an accessible investment, they offer a source of information without final guarantee of the product. Indeed, this is where speculation comes in since sellers will sell a promise of value, without any certainty behind it.
It is also important to note that there is a distinction between the token itself (and a record of title that lives on the blockchain), and what it refers to, whether it is an image, a video or even an audio file that is stored separately.
Although it is impossible to forge an NFT, this does not mean that the market is free of fraud. It is quite possible to monetize an NFT from a file that does not appear to the seller by making it look like one.
Wash trading involves artificially increasing the price of an asset by opening multiple accounts and trading with yourself, which is common in NFTs.
This approach can be easy to spot for experienced collectors, but it can be difficult for novices to recognize. And because blockchain transactions are anonymous and irreversible, if someone breaks into your computer and steals your assets, you have almost no chance of getting them back.
Despite the uncertainty, we can see the enormous potential of NFT in the future. Changes are inevitable, but ultimately the market is growing. NFTs can become the core asset of the entire virtual economy, far beyond digital art and object collections.