Debunking 4 myths about NFT art (a brief take)

What is the biggest Non Fungible Token (NFT) myth you have heard? Needless to say, we are in fascinating times crypto art industry termed as NFT.

An NFT is a type of digital asset based on smart contract platform that can take many forms, from anime art to a music album. The list goes on and on. NFTs are different from traditional fungible tokens because they are unique. We've seen them in the form of things like CryptoKitties, which allow you to trade and breed virtual cats on a given secondary market.

What does the media say about NFTs?

NFT has been attracting a lot of mainstream attention. A growing number of brands are becoming involved with these digital assets and exploring new ways to implement digital art in the future. As with any emerging technology out there, there's a lot of misinformation and myths that we need to clear up about digital collectibles in NFT marketplaces for end users.

NFT artworks and NFT marketplace businesses have also attracted a lot of backlashes lately for having no cultural relevance, leaving a carbon footprint due to their energy consumption, and many believing it's simply a bad investment strategy. Here we've busted some myths that may be keeping you from investing – or even considering the value of this exciting new asset class.

The Top 4 NFT Myths about investing in NFTs

Many people are sceptical about any NFT market out there or investing in NFTs because they don't understand the technology or the potential value NFTs represent. There are, of course, risks involved with NFT marketplaces but if you dig deeper and do independent research, you will be better prepared before diving into this game of creating and selling NFT artwork.

But it doesn't have to be so complicated. Let's take a look at the four myths listed down here.

Myth 1: NFTs harm the environment

It is a wrong assumption that all NFTs are environmentally taxing. NFTs may or may not harm the environment depending on which blockchain platform they are built on. Ethereum blockchain run NFTs have been infamous for their energy consumption because of the Proof of Work mining process. Cryptocurrencies like Cardano that deploy Proof of Stake technology to mint tokens are less detrimental to the environment and, therefore, energy efficient than the ethereum blockchain.

NFTs built on Cardano leave almost no carbon footprint. As time goes on, the technology will likely scale to create better ways of doing things. At the end of the day, it depends on which market you choose for storing your non fungible tokens.

Myth 2: NFTs are just temporary and overrated in the media

No. NFTs are not going through any temporary hype phase or trend. Understandably, an everyday person hearing about an image of a glittery ape getting sold for millions might be taken aback. As absurd as it may sound, there have been cases of ape NFTs getting sold for millions.

The secondary marketplaces in this space can transform in different ways in the coming years, making it more alluring. Tokens have given artists and creative people a chance to reclaim and own their creations. At the current growth, it seems as if millions of people could potentially be pouring in to join this trend of growing their portfolio of digital collectibles.

Blockparty platform signed a deal with Warner Music Group (as of January 2022). Also, many famous celebrities have talked about concepts about NFTs in Hollywood and whatnot. 

Myth 3: NFTs are just like stocks

The most noticeable difference between NFTs and stocks or cryptocurrencies is that they are fungible hence mutually interchangeable. That means that each unit is equal in value to another. An Apple stock is similar to another Apple stock, and an Ethereum token is equal to another. NFTs are non-fungible, meaning that each token that NFT collectors purchase represent a unique digital signature linked to a digital file that cannot be directly replaced by anything else. This concept has come to be known as Proof of Ownership.

In most cases, traditional stock business is regulated by governments around the world. And in most cases, stocks are supported by companies that release dividends to their respective investors. Stock investors hope that their stocks will generate revenue streams going forward. NFTs are traded in the secondary marketplace, and since they are enabled on the blockchain, they are therefore unregulated by governments.

Proof of Ownership:

For example, when someone buys Jack Dorsey's tweet, they are not purchasing the tweet that's still on Twitter, they are literally buying NFTs, and that's all there is to ownership of that specific token. They didn't author or host the tweet and have no exclusive rights to the tweet itself. They just purchased a token on the NFT secondary marketplace and are limited to reselling or showcasing it in that market only.

Myth 4: You can make money by flipping tokens

Not always! While there are a lot of successful examples where people have made money by making a bulk purchase and then reselling tokens, not all NFTs can sell and earn you money.

Factors relating to an artist's profile, social media presence, popularity, and most importantly, the scarcity factor can make a difference between what could be popular in the potential buyers' perception and what could be seen as just something worthless. In a broader sense, people in the marketplace buy depending on the community and if they feel they identify with it.  

One of the most significant psychological decision-making factors is when a potential buyer comes across a wall of unpurchased tokens, they may decide to drop the idea of purchasing something. In this marketplace, having lots of supply and low demand can make the art pieces appear as if they are worthless. It all boils down to the interest level.

It is true that some enthusiasts have identified popular NFT trends early on and have made enormous fortunes.

How to display NFT art

If you have been wondering how to display NFT art, the Metaverse is one choice that lets you display digital art in augmented or virtual reality to create immersive experiences. There are plenty of online NFT galleries like Spatial and OnCyber. Still, if there's one place where your collection can take pride—it's right outdoors, i.e., GO! NFT Berlin has a fantastic pool with some incredible NFT pieces from across Europe. If there's one place where they'll be able to see their own creation come alive, it would have been right here at this museum! Additionally, you can always engage with the community to look for new ideas. Some opportunities include metaverse Reddit forum, listening to NFT podcasts, participating in NFT discords, seeking NFT promotion services, and plenty of NFT nerds are always there helping each other out in the NFT community.

Beijing announced its own NFT plans: Creating a Chinese NFT industry based on government-sponsored infrastructure

Even though this news doesn’t relate much to the topic theme. Interestingly enough, China is making strides to create its own NFT industry, separate from cryptocurrencies. Earlier this year, in 2022, Beijing's state-backed Blockchain Services Network (BSN) rolled out infrastructure plans to support the deployment of non-fungible tokens (NFTs). To the rest of the world, this won’t mean anything more than just taking an NFT screenshot. Learn more.

And just for fun, we think it might be entertaining to watch this video titled “You wouldn't right click an NFT”

Final word: NFTs are here to stay

NFTs are a unique asset class that can significantly benefit your investment portfolio. There is no denying that the NFT market had seen success after a period when they became popular for achieving some level of trust. The slow rise in the past could be attributed to the traditional art world's misunderstanding about these digital wonders, but it can also encourage other artists who normally prefer digital art exhibitions, canvas and paintbrushes to explore this new medium of digital artwork as well! There are many examples of world-renowned and legendary artists who are exploring NFT platforms.

There are many misconceptions about NFTs and the NFT market out there, but don't let them deter you from exploring this new technology. Looking at the art market's future, it is almost certain that NFT will play an essential role in other blockchains and their network types.

These digital collections open up a whole new world for artists, musicians and brands to sell their mediums and network with new audiences and collectors. It will be exciting to see how the industry unfolds but even more exciting to participate in the NFT activities.