The world of NFTs are crazy. There are people making millions of dollars with just an image.
Surely, you’ve heard of this industry by now. Music, art, gaming…all of it is included in NFTs.
But are they a good investment for you?
There are pros and cons in my opinion that you have to wade through to decide if you want to jump in.
I’ll list a few of them for you here:
3 Pros of NFTs
1. The technology is safe (mostly) – Because nft’s use the blockchain, it makes transactions incredibly safe for the most part. There are still things than can be manipulated (more on that in the next email), but hacking, altering, and deleting are virtually impossible.
This means theft and proof of ownership can’t be changed or deleted which results in ongoing profits.
2. Consistently earning from your art – NFT’s allow you to sell your creation once and receive a commission forever. This is great for artists and musicians who now can take back control over their intellectual property.
3. Fractionalize Ownership of Assets – It’s challenging to divide up physical assets, but digital ones can be easily done through NFTs. Not to mention, it’s a great way to diversify one’s investment portfolio.
3 Cons of NFTs
- Fraud Issues – Some artists are claiming they are finding their work on marketplaces without their consent. Because of things being digital and things working in the DeFi space, it can make it difficult to correct these problems for new and established artists.
- No Income Generation – While you can earn from the sale of your NFT’s, you can’t earn anything from holding an NFT (unless it’s an airdropped token). So you can only hope to have your NFT appreciate in value before you decide to part with it.
- Illiquidity – This one is a big one. Unlike tokens, in order for you to profit from NFT’s, someone has to be willing to purchase it. So you could, in theory, own 1 million dollars in NFTs, but if you can’t liquidate it, it’s practically useless.
So should you invest in NFTs?
Personally, I believe this is one of the last areas of the DeFi space people should get involved in unless they truly have a plan.
But it’s great for diversification and appreciation down the road.
If you’re interested in NFT’s Opensea is the #1 network you’ll want to take a look at. But many other exchanges are also creating their own NFT networks as well.
Ok, let’s park it here for now.
In the next post, I’m going to share how some people made over 1 million dollars in minutes using a savvy loophole with NFTs.