The allure of NFTs is that they’re unique, backed by the blockchain, and theoretically less likely to be copied. As a result, artists and collectors say FOMO (fear of missing out) and speculation have driven the market for NFTs.
Some of the most expensive NFTs are generated using “non-fungible token minting,” which creates random digital art. So for every artist that makes millions on NFTs, there are many more hustling to make ends meet.
However, there’s no inherent reason why NFTs can’t raise funds for nonprofits and other worthy causes to unlock more utility.
Lower Copy-Pasta Art Risk
NFTs are often touted as more unique and less likely to be copied than their non-digital counterparts. But what is it that makes an NFT so special?
While they are unique, this uniqueness doesn’t come from any intrinsic quality of the object itself. Instead, the allure of NFTs is that they’re backed by blockchain—a digital ledger system where users can only make transactions with access to specific cryptographic keys. That means that no one else can make copies or duplicate an asset, theoretically making it less likely for fraud to occur.
However, there’s a catch. While blockchain technology allows for greater accuracy in tracking ownership and preventing copying, this does not guarantee trustworthiness. Instead, it merely helps mitigate risk factors associated with those things happening in real life.
The same goes for digital objects like art or music. While these items may not be easy to copy without breaking laws against intellectual property theft (IP), nothing stops someone from making an unauthorized copy!
Artists and collectors say FOMO and speculation have driven the market for NFTs so far
As with many new assets, the market for NFTs has been driven by FOMO and speculation. But unlike traditional art or stocks, which one can trade peer-to-peer directly between buyers and sellers, secondary markets for NFTs are less transparent. Some platforms are centralized and don’t allow users to sell their items on the platform conveniently.
Such developments lead to questions regarding fairly compensating artists for their work. It’s unclear whether this lack of transparency is due to intentional fraud or simply insufficient funds management by these companies. Regardless, it does raise questions about how sustainable some of these projects will be over time.
Many NFTs consist of random art
NFTs are a type of digital asset that one can use to represent real-world or virtual assets. An NFT is unique and has a fixed supply, unlike cryptocurrencies like Ethereum, which have an infinite supply.
NFTs are created using blockchain technology. So every time someone buys one on an exchange, it’s tracked by the blockchain in perpetuity, and its ownership history cannot be altered or deleted.
In the world of NFTs, some artists make millions. But for every one of them, many more hustle to make ends meet.
It’s not that there aren’t people who can make a living off of NFT sales. It just takes a lot longer than most people expect or want it to take.
The same goes for non-artists—plenty have found success in other ways with their NFT creations. Even so, it’s not as simple as spending time on something and getting paid for it later down the road when your work becomes valuable enough to sell.
There’s no inherent reason why NFTs can’t raise funds for nonprofits and other worthy causes
While NFTs’ functionality as collectibles is essential to their appeal, it’s not the only one. They also incorporate currency and property elements— as such, one can use them for various transactions.
For example, the creator of 0x Vectors is raising funding by selling off a portion of his digital artwork in exchange for ZRX tokens—the currency that powers 0x Vectors’ marketplace platform. In essence, if you purchase some of his art pieces with your ZRX tokens, you’ll be able to use those same items later when making purchases in 0x Vector’s marketplace platform. Of course, that is not an endorsement of the project or its NFT collection but merely an example.
NFTs can also be used to raise funds for startups. For example, a game where players trade cards representing different characters/entities within their game space environments to obtain special abilities or resources needed during gameplay sessions. These cards may be sold off later if new ones become available through later releases or expansion packs. That will remain viable as long as there’s enough demand from other players interested in buying them up too!
Doxxing creators can be tricky
It’s hard to verify if the people who create NFT art are the same people who sell it. However, there are ways you can investigate who’s behind an NFT. Your investigative options will depend on the platform where the art is listed.
On Ethereum, you can look at the blockchain and see who created it. If an artist pops up out of the blue, they may not be legit or have a small following of people who bought their art.
On OpenSea, you can go to the website of the artist who created it. If they haven’t published any other works on OpenSea and don’t seem to do much else with their time besides making NFTs, they might not be putting work into making good artwork for others’ enjoyment!
NFTs are still in their infancy, so it’s hard to know what the future holds.
One thing we do know is that this technology has the potential to transform how we buy and sell art.
With blockchain technology, you can collect digital art without worrying about anyone else gaining access, pirating it, or even stealing your wallet full of rare digital cats!
But no matter what happens with NFTs in the future, it looks like they’re here to stay… at least until someone invents a better idea that lets us put our money where our heart is 🙂
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