All things blockchain and cryptocurrency are all the rage in today’s digital society. One of the biggest trends going is the new Non-Fungible Tokens, or NFTs craze. People have been making ridiculous amounts of money by selling their NFTs. However, there is a lot of uncertainty surrounding these digital tokens. Here are the four biggest NFT myths to avoid getting caught out by.
Myth 1: NFTs are completely worthless.
Many people question the inherent worth of NFTs and go on believing that they have no inherent value, making them completely worthless. This is one of the most common misconceptions, and to refute this myth, you have to understand how the blockchain at its core works.
When an asset gets sold on a blockchain, like Ethereum, for example, the asset’s ownership is permanently recorded in a set of code, which cannot be altered. Try as someone might to take a screenshot with the goal in mind of reselling this image under their name, they would easily get caught. All it takes is a very quick look at the asset’s details.
What’s more important, is NFT’s aren’t just files that exist on the internet, they are so much more than that. Many NFT’s have utility and it can show up in a variety of ways such as
- VIP access to a one-time event
- Entry to a private community
- Discount on products and services
- Early access to an album or book before the public launch date
It’s clear, that NFTs have value in the crypto marketplace.
Learn more: The Top 5 Brand NFT You Need to Know Right Now
Myth 2: NFTs are bad for the environment
This is a hot topic in the cryptocurrency world, as the climate crisis continues. Most of the popular blockchains, like Bitcoin and Ethereum use a ‘Proof-of-Work’ system, which forces each computer in the network to solve complex maths problems and it uses up a ton of energy. Also, the equipment is high specialised, and cannot be used for anything else or recycled easily, meaning a lot of waste for our landfills.
Since NFTs are sold on these blockchains you would think this makes them bad for the environment, but this isn’t the case. Ethereum, where most NFTs are sold, is moving away from a Proof-of-Work model in favour of Proof-of-Stake, which is must less energy intensive process. Not only that, but most of the cryptocurrencies’ energy sources are also sourced from renewable energy sources, making them greener than once thought.
Learn more: How Much Does it Cost to Make an NFT?
Myth 3: NFTs are being used for criminal activity
“There is a very common misconception that crypto is being used mainly by the rich to avoid paying taxes and criminals, for money laundering” says Robert Kinser, a business writer at Assignment writer. This simply is not the case.
Cash is actually more dangerous than crypto when we are talking about crime. Data tells us that hard cash is the preferred method to conceal illicit dealings by far. How much more? 800 times as much, in point of fact, and this is a conservative estimate, as the whole point of money laundering means makes it hard to detect and trace the dirty money. Crypto doesn’t come anywhere near the mark here.
Not only that, everything on the blockchain is 100% transparent. Every time somebody moves money around, anyone and everyone can peek into the actual database and see exactly what is happening. And while, yes, accounts have pseudonyms attached to them, everything is still traceable, making cryptocurrency a bad choice for money laundering.
Learn more: How to Sell Music As NFT?
Myth 4: NFTs are much too complicated to get involved with
Remember crypto is still in its infancy, even the oldest of them, Bitcoin, is only 12 years old. So, its going to take some time, but eventually things will get to a point where you don’t really need to understand how the blockchain works.
If you really want to know about NFTs, there are loads of helpful videos on YouTube that can help explain them. Also, platforms like Melon.ooo let you buy and sell NFTs in just a few clicks.
These are the four most common myths that people keep falling for.