A while back, we discussed some of the most common crypto myths that circulate out in the world and what are actually the facts behind them. You shouldn’t be surprised to find out that NFTs are also surrounded by a particular veil of mystery, allowing people to create and believe all sorts of common NFT myths that aren’t necessarily true.
People are always entitled to their opinions, but you should be able to distinguish between what is true and what is outrageous fantasy. Let’s check some of the popular misconceptions surrounding non-fungible tokens and lay them to rest.
NFTs Quick Recap
We know you know, but here’s a small reminder anyway. NFTs, short for non-fungible tokens, are digital assets stored on a blockchain that can be traded or sold. They are unique, one-of-a-kind digital collectibles that can range from photos, music, and videos to any form of digital art.
Besides their use in the art world, they have slowly but surely made their way into the gaming industry, empowering the exciting “play-to-earn” game model. If you want to know more about this new technology, you can check our NFT-related article.
Myth No. 1: NFTs are just another type of cryptocurrency
Fact: Some people get confused about non-fungible tokens and crypto, thinking they are one and the same. Both are digital goods based on blockchain technology. However, while all crypto coins are fungible, NFTs are not. A fungible item is one that can be replaced with another identical one of the same value. Each non-fungible token is unique; therefore, even if it’s replaced with another token of the same equal worth, it will be different from other standpoints, like what it represents or how it can be used.
Myth No. 2: All NFTs are digital artwork
Fact: Since NFT art entered mainstream attention last year, people assumed that any NFT project refers only to digital art. There are indeed a lot of NFT artworks created by original artists, disrupting the traditional art world. Nonetheless, many NFTs do not pertain to the art sphere at all. For example, the play-to-earn game model we’ve mentioned earlier allows the use of NFTs as in-game assets that can be anything from player avatars to skins or even weapons. As time passes, most NFTs will have different types of uses: copyrights, housing deeds, intellectual property rights, and who knows what else.
Myth No. 3: The newest get-rich-quick scheme involves NFTs
Fact: Since NFT technology is still relatively new, a lot of people don’t really understand it and label them just an easy way to make a quick buck. While NFT owners consider crypto art the future, skeptics are dead set on proclaiming NFTs are just the newest modern scam.
Ownership and selling NFTs is nothing different from selling limited edition copies of work, a concept we’ve been familiar with for centuries. Of course, some will experience investment successes while others might not be so lucky, but that has more to do with the cultural relevance of a certain NFT than with its nature.
Myth No. 4: NFTs are environmentally taxing
Fact: One of the common myths that these tokens share with cryptocurrencies is that they are bad for the environment. Since they are sold on blockchains, people assume that NFTs are bad as they lead to considerable energy consumption, as it’s the case with Bitcoin cryptocurrency transactions. The truth is that most of these virtual goods are sold on other blockchains that use Proof-of-Stake instead of the Proof-of-Work model, which is more impactful on the environment. Combining staking with renewable energy sources makes NFTs and several cryptocurrencies environmentally friendly.
Myth No. 5: NFT resale rights undermine the actual value
Fact: Let’s circle back a bit to the point that the earliest adoption of NFTs was centered around the artistic community. The main economic benefit that this type of digital asset brings to an original artist is that it’s a widely accepted royalty system. Artists not only can sell NFTs as an easy way of selling their art, but they also get a commission every time their artwork gets resold. This ongoing investment wasn’t available for legendary artists from centuries ago.
It’s intriguing, to say the least, what people are claiming about these unique creations. It is normal to have some doubts or reservations in the beginning. Still, we’re quite convinced that once the NFT market expands further and everyone understands the value of such an actual asset, the rumors will die down, and more people will want to join in on the NFT action. Meanwhile, you have us to guide you through the ins and outs of the fascinating crypto universe.
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