Will you buy that funky monkey?
Ask any NFT investor or creator what it is, and not even they can explain to you what an NFT is and why it’s worth investing. The cliff note is that an NFT is a unique key you receive to show that you own whatever that unique key is linked to, usually digital art.
Owning the NFT does not mean you own the physical – or digital – version of the art. Rather, it shows that you own the unique digital asset associated with a piece of media. You cannot prevent others from downloading the JPEG of the art. There is no recourse to prevent the artist from creating replicas and selling that on the blockchain or elsewhere. And you can’t deter your friends from mocking the investment.
But the reason NFTs have maintained the curiosity of investors is that at the beginning of 2021 when Beeple sold a digital art collage for $69 million, everyone took note of NFTs and their purported value.
What has since emerged is a far more sobering picture, that these priceless artworks could be worth nothing.
Unless NFTs show signs that they have some value or utility, the trend will mimic the penny stock fraud of the nineties. Many inexperienced investors left holding the bag.
The Verdict: Avoid investing in NFTs unless you understand the blockchain and have a clear exit strategy.