NFTs are one of the most misunderstood assets in the crypto world. While the principle behind them could solve real-world issues, the way they are being used is completely corrupting the image the public has of them. You also have people who want to get in on the action and assume that they can just post doodles on OpenSea and make money, but it’s much more complicated than that.
Let’s take a look at some of the most widespread myths about NFTs and the truth behind them.
NFTs are Useless
It’s easy to look at the myriad of copycat computer-generated NFT “art” projects and assume that NFTs as a whole are useless, but NFT technology is truly revolutionary. NFT, at its core, is a way to tokenize property and verify ownership on the blockchain. This allows people to not only prove that they own property but do all sorts of things with it like selling it without the need of a third party or distributing ownership and allowing the original owner to earn royalties passively.
The only problem is that the technology has been used in the cheapest way by people who want to make quick money grabs. But once the initial craze fades away, we could start seeing real projects and other uses for NFT being introduced.
Anyone Can Launch an NFT
Another thing people assume is that if someone can make millions with a program that generates random images, then maybe they could too. But you have to know that launching NFTs takes time and money, and success is far from guaranteed.
Launching an NFT collection could cost you as much as $100,000 depending on how complex your project is, so be prepared. You’ll also have to set money aside to hire an NFT Marketing team because you won’t be able to generate enough traction to cover your costs on your own. So do your research on how much you can expect to spend to create, launch, and maintain an NFT collection before you get started.
NFTs Hurt the Environment
One of the biggest gripes people have with NFTs is their supposed impact on the environment. The thing is that the blockchain needs energy to be maintained, and NFTs are not more or less energy-consuming than any other asset on it. Second, Ethereum, which is the blockchain that is most used by NFT, is moving towards more environmentally friendly models while blockchains like Algorand and Solana have been introduced to tackle the blockchain’s energy issue.
So, not only are NFTs not destroying the environment but they will be even less energy intensive in the future.
When You Buy an NFT, you Own it
Not really. NFTs are always stored in a single location, and an NFT is nothing but a certificate. This certificate could mean that you have full rights over the NFT, but it’s not always the case.
Think of an NFT as a license key to a piece of software that is stored on a blockchain. You can transfer this key to someone else and allow them to use the software, but it is still not yours and the developer could still have full rights to it, so know what you’re buying before you assume anything.
NFTs are much more complex than people think and are not only about cheap computer-generated pictures. So, learn as much as you can about the if you were thinking of renting or buying them.