What are NFTs and why do they have value?
Why are NFTs so valuable and what are they?
To answer this question, you must be logged in.
Already have an account? Login.
By Signing up, you indicate that you have read and agree to Sage's Terms and Conditions and Privacy Policy
Answers ( 1 )
NFTs (Non Fungible Tokens) are a cryptocurrency pump and dump scheme, a novelty that is generating profit for very few creators but mostly for services that are overpaid to register those NFTs. Prices of NFTs for art are being inflated by market manipulation and a frenzy around the fad but are extremely unlikely to retain any long term value. The NFT architecture might possibly provide value some day as digital IDs that allow you access to something that requires a membership, in other words as an alternative to today’s standard username-password combo.
The blockchain technology that underlies cryptocurrency is used to identify a bit of data that says the purchaser “owns” a piece of digital art in a very abstract way. It gives no rights of reproduction, it conveys no copyright, it gives no special access to a version superior to the limitless identical copies of it that exist, it provides no ability to restrict the art. NFTs don’t add anything to the system of art provenance that museums have maintained for a very long time.
People are paying real money for a token - a data record of a URL to a web page. That web page has a JSON metadata file on it that states the name of the artist, the title of the work, and includes a copy of the image no different from any other copy of that image. Numerous things can go wrong:
• The link could go bad because the NFT service (such as Nifty) goes out of business.
• The web host where the page with the information is located could go out of business.
• The Artist dumps something else at that URL.
• The artist just forgets to pay the bill for their URL registration or their website hosting.
• You may have bought an NFT from a market that allows anyone at all to sell an NFT of something that they didn’t even create!
In any of these cases, all you have is a very expensive bit of data. CheckMyNFT reports that many Nifty links are already broken. The NFT market plunged by 90% in June of 2021.
The only thing that gives that data record any value is that the person buying it believes that it has value, and that someone else will want to own it and pay more for that privilege than they did. Many of the people bidding or paying inflated prices for NFTs are cryptocurrency moguls trying to create more buzz around the cryptocurrency and MFT markets.
Blockchain technology is likely to be genuinely useful in the future, but cryptocurrencies as they exist today are much less likely to be useful in everyday life as a widely accepted currency instead of the unregulated investment novelties that they currently are. NFTs as art are very likely to fizz out entirely in the near future but might live on buried inside an online ID for Netflix or the like.
https://mcn.edu/mcn-insights-nfts-are-a-scam/
https://drckangelo.medium.com/nfts-might-be-this-years-biggest-scam-d40a8d43457