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Is This a Good Idea To Invest In NFT In 2022?

24 Dec 2021

Introduction

We're now in the fourth quarter of 2021, and with 2022 on the horizon, a number of entrepreneurs and investors are seeking for new areas to invest in. Even though every investor is aware that investing entails risk, many investors prefer to play it safe. That implies no one wants to put money into something that isn't going to pay off or isn't lucrative. 

You may think about the investment security of NFT. If you didn't earn money from buying and selling NFTs in 2021, or if you're new to investing, keep reading because we'll give you reasons why you should buy NFTs in 2022 in today's post.

What is NFT?

NFT is an abbreviation for non-fungible tokens. Let's start from scratch: what exactly does non-fungible mean? A good or asset that may be traded for another good or asset of equivalent value is referred to as "fungible." A $1 bill is fungible because it can easily be exchanged for another dollar note.

An NFT has exclusive ownership of a digital asset. It can be a piece of art or an in-game purchase, or a tweet. Although you may buy an NFT at a set price, its market value is likely to change because it is non-fungible.

How Does NFT Work? Difference Between NFT and Crypto

NFTs are frequently purchased and traded using cryptocurrencies such as Bitcoin and Ethereum, but they are not cryptocurrencies in and of themselves. Cryptocurrencies are fungible like national currencies. Every Bitcoin value is the same, and they can be interchangeable. You'll still have one bitcoin left over. Due to the unique nature of NFT, they have no prior value outside the platform who are willing to pay for them.

Why is NFT So Popular?

It's also because you may have lately (but not that recently) heard that a guy known as "Metakovan" paid $69.3 million for a digital art piece that is also an NFT. Metakovan is also a bitcoin billionaire, for your information.

And you will earn easy money whenever you sell your NFT. You will receive a 10% commission if the person resells your NFT after purchasing. Until someone destroys or stops selling that NFT, you will get it continuously.

Another point is that while NFTs are unique, it is not fair to charge a premium for them. It all depends on people's perspectives. Some collectors are willing to spend millions for it, while some may refuse it even if it is free.

These might be the reasons behind the popularity of NFTs.

Should You Invest in NFT in 2022?

The more you attempt to understand the strange and mystical world of non-fungible tokens, the more you may wonder why anyone would buy an NFT. There are a few reasons why folks with extra wealth choose to invest.

Rarity

If you want to pick someone's attention to a certain item, you have to show the rarity of that item. NFTs are rare because they can only have one owner at a time. This incentivizes potential buyers to grow focused on a specific item, fearing that someone else will be the sole owner of an NFT they seek.

Consider when you see a pair of sneakers you want to buy, and the website informs you that there is only 'one pair remaining.' If you're like the majority of us, this heightens your sense of scarcity and motivates you to make the purchase - even if it doesn't make financial sense for you.

Provides More Liquidity

When assets are tokenized, the investor has more control over the asset. Liquidity means you can turn an asset into cash at any time. Because NFTs are more liquid, you may buy a costly NFT artwork today and decide to sell it at the same or even greater price tomorrow.

Applications

NFTs are being used in the fashion, sports, and gaming sectors. Decentral gaming, for example, is establishing a virtual environment in which individuals from all over the world may compete in poker tournaments by buying and selling NFTs. A $1000 NFT piece, for example, may gain you a seat at some high roller tables.

Collectibility

Non-Fungible Tokens are essentially trading cards for the super-rich, similar to how kids trade baseball cards on the playground. While these cards have no intrinsic value other than what the market assigns to them, their changing value makes their collectability and trading potential similar to a high-risk gambling game. As a result, it's simple to draw parallels between the NFT and the art market.

Unlike the art market, however, NFTs provide artists more liberty because they don't have to depend on galleries or auction houses to sell their art anymore. Artists may sell their artworks directly to purchasers and keep more of the revenues by eliminating the middleman.

Some Opposite Thoughts

NFTs, which appeal to the risk-taking investor, provides a one-of-a-kind, high-stakes possibility to make some large profits—but be careful; this only happens on rare occasions. They're not as glamorous and don't have the same cultural cache, but they're more reliable.

You'll require to create a digital wallet first if you want to be a part of the NFT realm. This is where you will keep your cryptocurrencies and NFTs. You'll next need to seek NFTs on sites like OpenSea.io or Rarible, discover one you like, and then acquire the appropriate cryptocurrency for that specific NFT before making your purchase.

Will It Be Safe To Buy NFT in 2022?

It's safe to purchase and hold NFTs, just like it's safe to buy and own cryptocurrencies, but that doesn't imply it's without hazards. What exactly are these dangers? The technology behind the NFT system prevents your NFT from getting stolen. But without enough research before purchasing an NFT item, it may lose its value in the coming years. That means you cannot recover the money spent on it. Aside from that, if you get a popular and limited edition NFT, you won't have to worry about its value declining over time.

Final Thoughts

Given that NFTs are a viable option, you may begin investing in digital collectibles, assets, art, and so on. Choose the option that best suits your storage and purchasing requirements. Use the cryptocurrency to complete the transaction if you are interested in non-fungible tokens. Also, keep in mind that it is a very speculative and young business. As a result, certain tokens may have a high rocket value while others may have a lower value. As a result, it's a good idea to create an overall investment strategy before you start investing. Before selecting an NFT marketplace, be sure to verify the fees.

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