Pros and Cons of Buying NFTs

Though the risks above might have out the fear of God into you it is worth balancing out the pros and cons of buying NFTs before deciding whether it is something you want to pursue.

Pros

• The application of NFTs is expanding across different industries and use cases so understanding how they work is a valuable skill; play-to-earn, move-to-earn, the Metaverse, the opportunities are endless.

• The number of people who own NFTs is still tiny so you are still early. With the right amount of research on Twitter and Discord it is possible to invest in NFTs with significant upside, but be realistic with your expectations.

• Owning NFTs can bring you joy and opens up access to thriving communities of like-minded individuals that can expand your horizons.

• There are an increasing number of DEFI services that allow you to unlock the value of NFTs without selling them, by using them as collateral (based on Floor Price) for loans. 

Cons

• The NFT scene is like the Wild West with far more bandits than sheriffs. If you aren’t prepared to apply effective security practices you should expect the worst.

• The huge increase in value of a small number of NFT collections has sparked an avalanche of NFT spam and cooling in the overall market that could see the majority of NFT investors losing money.

• Most NFTs have no more utility than a free jpeg so you might be left wondering what you paid €1,000 for.

• Making money from trading NFTs is no different to any other form of investment with access to information key. Those that know don’t tell, and those that tell don’t know. 

Having read through the dangers associated with buying NFTs you may feel that they are simply not worth the risk. The reality is that the risks associated with NFTs are the same for crypto in general. The most effective way to mitigate the risks of buying NFTs is through education. 

Educate yourself about crypto custody and information security best practices. Understand what an NFT is and what might give it value, rather than being swept up in FOMO. 

NFTs are an exciting new application of blockchain technology, not a get-rich-quick-scheme. Think about NFTs in terms of the utility they might provide or the simple enjoyment of owning a cool piece of art, rather than how you might flip them for a fast profit.