The Buyt Desk
Non fungible tokens (NFT) are the new way of buying exclusive digital assets. These digital assets are not restricted to a single art form. From music and art to toilet papers and tacos, digital assets are selling in millions of dollars through NFT. But is NFT worth the value that it is being sold for or is it merely a hype. Experts have a mixed response to this. A few believe it is a bubble poised to pop, while others say it will have a lasting effect on investment.
What Is NFT?
The Non fungible tokens (NFT) is a digital asset, and it represents objects, such as videos, art, music, videos, etc. These objects are encoded with some software similar to crypto. These are purchased and sold online with cryptocurrencies.
If you think NFT is new, it is not. It has been in the market since 2014 but has gained popularity because people have understood its purpose lately. It has become a popular way to market digital artwork.
What Is the Use Of NFTs And Who Will Benefit?
NFTs is giving content creators and artists an opportunity to monetize their work. The artists no longer have to depend on galleries and exhibitions to showcase and sell their work. With NFT, they can sell it directly to customers. The artists benefit in two ways by selling their art this way.
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They are selling work directly to customers. No middlemen are involved, which means no profit sharing.
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They can program in royalties. This way, they will receive a percentage every time their work gets sold to a new customer.
Generally, artists do not get a percentage after the first sale of their work.
How Does NFTs Work?
The NFTs follow blockchain technology. It is a distributed public ledger for recording transactions. Many blockchains support this, but Ethereum is the most accepted currency.
It is created from digital objects that could be both tangible and intangible. E.g. are videos, collectables, art, video games, music, designer sneakers, etc.
Even a tweet can be an NFT. The co-founder of Twitter sold his tweet for over $2.9 Million as an NFT.
How Can One Buy NFTs?
There are a few things you must know if you want to buy NFT.
First, create a digital wallet to keep cryptocurrencies and NFTs. Then buy some crypto that NFT accepts. After this, you can buy NFTs in exchange for crypto.
Once your wallet has the required funds, you can visit NFT sites to shop. The popular marketplaces for buying NFT are OpenSea, Foundation, Rarible etc.
All these platforms and many others are a place for NFT creators and collectors, but before buying any work, you must do your own due diligence.
Should You Go For NFT?
NFT is new and looks attractive, if this is enticing you, then remember, all this doesn’t mean you should go for it. The experts say it is new in the market. So, its future is uncertain.
Unlike the other investment products, it is not driven by economic fundamentals. It purely depends on how much a buyer is willing to pay for it. That means the NFT you have brought might not give you anything if no one wants to buy the work you own.
Furthermore, NFT also comes under capital gain taxes. However, there is no tax rule set for NFT so far. Thus, if you are interested in it, proceed with caution and research.
