NFTS were one of the most searched words in 2021. However, being one of the most popular words in digital media comes with a rise in misconceptions. Let’s debunk three common misconceptions about NFTs and clarify the truths to better understand the potential value and utility of NFTs.
Part 3 - NFTs have zero utility and are worthless
A NFT’s true utility comes from its underlying blockchain technology that enables the ownership, transparency, and security of digital assets. Furthermore, a NFT’s true value lies in its provenance.
The bulk of people associate NFTs with aesthetically bizarre digital avatars used as profile photographs on social media accounts or meme art pieces that sell for millions of dollars. Surprisingly, NFT art and avatars demonstrate the potential utility and value of NFTs. How? Artists can simply monetize their work without the help of a third party using NFTs. They can do so by minting NFTs and selling them directly on NFT marketplaces. Traditional artists can now experiment with new digital mediums to convey their artistic vision while remaining protected from being copied. Each NFT has provenance thanks to the blockchain's record of ownership and transactions, making the artwork one-of-a-kind and priceless.
This is one of many pros of NFTs. Additional advantages include the fact that NFTs foster marketplace efficiency, meaning the conversion of a physical asset into a digital one can streamline processes, eliminate intermediaries, enhance supply chains and bolster security. Or that they can be used to fractionalize ownership of physical assets, leading to greater liquidity and higher prices. And finally, the idea that NFTs can provide diversification benefit to an investment portfolio. As discussed above, they have distinctive qualities and offer benefits we are only just beginning to comprehend and realize. Once we create deeper understanding, NFTs open a world of opportunities.
What did you think of our three-part series? Did it enlighten you? Tell us in the comments.