NFTs: The Aftermath

NFTs or Non-Fungible Tokens is a relatively new addition to the long line of additions made to the market. NFTs are a term of heavy contention, especially with the general public, for their highly volatile and scam-prone nature. An NFT is a digital piece of work, usually art, which is unique ( hence the name Non-Fungible).

The problems are apparent even to the common person. If the item in question is digital in medium, what is the point of owning a deed that says it is original if it can be copied with just the click of a button?

Here is where the simple stuff is thrown out of the window. While it is true that each ‘token’ can be easily copied, the appeal of having the rights of the original is two-fold. First is the unrestricted access of the ‘token’ in question. As a full owner of the intellectual property, the owner can use the item as he/she sees fit. The second is where the shady part of the deal seeps in.

Historically products have been measured in terms of the amount of effort required to produce it. As the stock market has expanded over the decades, the looser has the method of valuing objects been. NFTs, being simple digital art, are not valued almost anything at the beginning, due to the low cost ( in most cases ) and effort required to make them. The value of an NFT is what the public perceives it to be. This is the reason some art pieces (digital) have gone for ridiculously high prices, simply because they have been placed into an auction and the bidders valued it high in their mind. Often the prestige of owning an expensive NFT is not the NFT itself, but the fact that the NFT was bought for such a high price. For example, The highest sold NFT was over 60 million dollars. It is not intrinsically worth 60 million dollars, but it was bought as an artificial luxury good for the sake of prestige.

If the public decides the price, what happens if someone can influence the public? The recent NFT scams have all been involving influential people (usually the ones who have a social media outlet) trying to convince their fans/followers to invest in an NFT they endorse and pulling the plug the moment they think that they have reached the peak of extracting the money.

So are NFTs bad or good? Due to their volatile nature, NFTs are a mere speculating tool often used to fool the unsuspecting public who just wanted to dip their foot into the market, and found out they have no shoes left to cover them. I personally feel NFTs are unnecessary in the world, especially with the amount of ambiguity in the financial world.

Hope you have a safe and great week ahead!