NFT’s or Non-Fungible Tokens are one of the most on trend investment opportunities available at present. Following on from the Forex and then cryptocurrency booms, we now have NFT’s. A non-fungible token sounds very complicated but in reality it is simply a way of showing that you own a digital item.
What is an NFT and how can I get one?
An NFT is simply a digital item that belongs to the person who bought it via ‘the token’. It uses the same blockchain technology as cryptocurrency and you pay for them with cryptocurrency, once you have bought it you can them store it and sell it again at some point in the future (hopefully for some profit). There are marketplaces online where you can browse through thousands of NFT’s and purchase them, one of the most popular is called ‘OpenSea’. On this site you can purchase digital art, collectibles, virtual real estate and more. The most popular form of NFT is definitely digital art and collectibles.
What is the most popular form of NFT?
The most popular type of NFT is digital art. Many of the most famous artists in the world like Damien Hurst have created catalogues of digital art that they are selling on NFT marketplaces like OpenSea. Artists tend to create ‘collections’ which will be say 50 pieces of artwork that are similar and of the same theme but ever so slightly different to give it the individuality and therefore the value. If you are looking to purchase art as an investment then, like in real life, it is always wiser to purchase a well-known name, the problem with this however is that you will be paying much more and are therefore likely to make less profit in future. The only other thing to consider when investing by buying NFT’s is that artists can chase the money, flood the market with their work and therefore the value of each individual piece can go down after you’ve bought it. It is always important to research as much as possible before investing.
Beware of the fraudsters
As with anything online there are many people looking to take advantage of you and steal your money and there are 2 things in particular to look out for with NFT’s. The first is ensuring that the thing you are buying is actually the original. Much like with art in real life, there are copies and fakes that people try to pass off as real but with digital it is even more difficult to tell just by looking at it. The key to buying digital art is to research the artist, go on to their social media profiles and check that the piece you are looking to buy is actually for sale and go on the site that they say it is listed on, it is worth an extra 10 minutes of research to ensure you aren’t wating your money. There are many example of NFT fraud, some involving tens of thousands of pounds so always be careful. The second thing to look out for is the classic ‘phishing’ scam, a duplicate website that has been set up to look like the real one in order to collect your personal details and bank details.