Myth Related NFTs: 7 Fact Claims Checked


With the mass marketing of basement coders worldwide, NFTs have been named with acronyms that do little to clarify their convenience.

You probably know by now that NFT stands for Non-Fungible Token; what is perhaps less clear is what “Fungible” really means; in this context, it means interchangeable.

Think of an ounce of platinum. That is platinum fungal, which means it can be exchanged for any other ounce of platinum. Now think of a piece of jewelry made from one ounce of platinum. That jewelry is not interchangeable with any other ounce of platinum; it has the same core materials, but has unique characteristics that can be artistically valuable, such as shape or craftsmanship. The jewelry non – fungal.

T for Token is the most important letter in NFT. Signs are small pieces of blockchain that form a universally agreed dataset. You do not need to know how it works any more than you need to understand how a computer processor works; you just need to know that it exists.

Like any new technology, NFTs are surrounded by propaganda, anti – propaganda, suspicion, evangelism and confusion on Facebook. In this post, we will look at some common misconceptions so you can develop an informed opinion.

1. NFTs are Harmful to the Environment

Let’s tackle this one first because it’s the classic argument against anything in the crypto-space, whether Bitcoin or NFTs, and it’s nonsensical.

The cornerstone of this myth is that cryptocurrency transactions use huge amounts of electricity, the generation of which is terrible for the environment. The answer is threefold:

First, electricity is used to run blockchain-enabled computers, such as Ethereum. The blockchain is maintained whether NFTs are hit (programmed) or not.

Secondly, NFTs tend to hit blockchains like Ethereum that are moving to less resource models, a blockchain like Solana that already has smaller resource models, or a blockchain like Algorand that is carbon neutral of already.

Finally, the truth of the matter is that electricity is not essentially killing a planet. Renewable sources such as solar and wind can power the grid; it’s just that power companies make higher profits by burning fossil fuels. That swanky new electric car you bought so you can drive guilt-free fueled by fossil fuels is on the territory of the power company (and that is before you consider the damage done to extract those minerals from the ground ).

Until the computer you are using is solar powered, repaired and upgraded, anything digital is terrible for the environment; NFTs are just as bad, but they are nothing more than anything digital.

2. NFTs are Direct [Insert Patronizing Economic Metaphor Here]

NFTs are often referred to as the Ponzi Scheme, and crypto in general. In the 1920s, Charles Ponzi prevented investors from handing over money. Returns were paid to early investors with the income from new investors. Early investors made a lot of money, after which investors lost everything.

One of the key features of the Ponzi Scheme is that it is a ploy of confidence that presents itself as low risk. NFTs are widely regarded as a high risk investment. Calling NFTs on a Ponzi Scheme is a great way to let people know that you do not know what a Ponzi Scheme is.

In the 17th century, the price of tulip bulbs reached astronomical proportions. The Dutch tulip trade was a complex system of economic investment that eventually deteriorated, thanks in part to a global pandemic. Since then, Tulpenmanie (Tulip Mania, in English) has been a subword for economic bubble.

NFTs are often linked to Tulip Mania, thanks in part to prices and the prospect (or hope) of a market crash. However, if you drive through the Netherlands today, you will see huge fields of tulips. They are not growing because they are worthless.

While demand may be volatile, it does not fluctuate as much as media hysteria suggests. And finally, tulips are nice.

3. You Can Buy And Sell NFTs

This is where pedantry plays a role. You cannot buy and sell NFTs; NFTs are the medium through which you transact digital goods and services (or, in some cases, physical goods and services).

If you have software installed on your computer, you probably have a license key. The license key recognizes that you have certain rights to such software, such as being allowed to use it to produce your own digital goods. The key to the license is how the company identifies you as the person to whom it sold those rights.

NFTs are license keys for digital goods recorded on a blockchain rather than stored in a single database.

4. NFTs can be easily Copied

When I was a kid in the 90s, I used to record music from the radio with a tape player. I would make tape mixes and give them away. I was, in every literal sense, a music pirate. And it wasn’t just me; Home taping has kept the cassette industry going for many years with its date of use. Despite this, the music industry did not collapse.

Art is even easier to copy than music as there is no danger of a fluctuating DJ playing over the introduction to I Wanna Be Adored.

On my morning commute, I pass by a shop that sells art prints. About 80% are screen prints of Marilyn Monroe. They are original prints made by an artist and sold in considerable sizes. One of these pieces does not diminish the quality, importance or financial value of Andy Warhol’s Marilyn Monroe prints at MoMA New York.

The difference is that MoMA’s Warhols are basic – they can be tracked time and place and authenticated like Warhol. Digital artists’ NFTs provide exactly the same base.

5. You can get rich from NFTs

Earning money, potentially a huge amount of money, is one of the main factors behind the boom in NFTs.

But the truth is, while a lot of money can be made – some NFTs sell for millions of dollars – most NFTs sell for a modest amount.

If you are a skilled artist with basic ideas, you can make money selling your art as NFTs. If you are a skilled trader who can recognize quality, you can make money from buying and selling NFTs. However, few people get rich.

6. NFT Resale Rights undermine Value

NFTs have many potential uses, but digital art has first been adopted. The main economic benefit for artists is not only an easy way to sell their art but a widely accepted royalty system in which the original artist receives a commission each time the artwork is resold. It reflects the continued investment being made by the artist by continuing to produce and promote his work.

It may be a strange way to approach ownership, but resale rights are nothing new in the art world. In the EU and the UK, artists’ resale rights are legally recognized. In France, the legal rights of the artist or the artist’s descendant to receive compensation from the sale of works of art have been established in law for over a century.

Despite high – profile artists like Robert Rauschenberg fighting for resale rights, and legislation in New York and California that supports the concept, resale rights are not yet recognized in the US.

NFTs introduce a more equitable system that gives all artists the same rights as Europeans already have.

7. NFTs Are Worthless

Anything with value, whether physical currency, NFTs, or a block of wood, has no value because two or more people agree that it has value.

Honus Wagner is reportedly the most expensive baseball card in the world in a minor condition, priced at $ 3m. It might be hard to understand why anyone would pay $ 3m for a piece of cardboard with an image of a 1950s sportsman on it, but it seems that someone would pay.

All the goods are worth it, all the things we spend money on, what we agree are worth. For me, a tulip bulb is worth more than a baseball card, but who knows, you may not like tulips.

There are many flaws in the systems that use NFTs, and there are plenty of barriers, but if you want to create and sell artwork and someone wants to buy it from you, NFTs are a great way to facilitate that transaction.

 

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