Are NFTs Worth Buying?

NFT, Digital Art

This is a question that many people are wondering as they see the crazy prices and hype of non-fungible tokens, or NFTs, in the digital art world. NFTs are unique digital codes that are stored on a blockchain and are used to prove ownership and authenticity of a specific digital item, such as a picture, video, or sound file.

NFTs have become a hot trend among artists, collectors, and investors who think they are a new way of making and owning digital art.

The Volatile Nature of NFTs

NFTs are also very risky and unpredictable, meaning that their value can change a lot in a short time, depending on market demand and supply. This makes them not very reliable or stable investments, as some NFTs can lose almost all their value in a few weeks, months, or years, while others can go up in price.

Let’s check out something really interesting that happened with Logan Paul’s NFT. This is already old news, but back in August 2021, he bought it for $623,000. The artist Bryan Lie from Jakarta made this special NFT called Bumblebee, inspired by the Transformers character. Logan Paul kind of shrugged off the importance of his NFT, saying it’s worth nothing, and he even immortalized his mistake. The picture shows him wearing a costume that looks like the Bumblebee NFT.

A Tweet from Logan Paul immortalizing his msitake.

Sometime around October 2022, Logan Paul’s NFT from the Azuki collection lost a significant chunk of its value and dropped to an unspecified amount. Reports differ, with some saying it’s valued at $10 while others suggest $25. He confirmed this loss in a tweet, yet various sources provide conflicting figures regarding his NFT’s value. The snapshot from his Snapchat that’s supposed to demonstrate the price difference hasn’t been proven authentic and might have been altered or fabricated. Certain individuals have even highlighted that the origins of the snapshot are uncertain.

As indicated on the Azuki website, their NFTs are currently up for sale at 0.01 ETH, which was approximately $40 in and around October 2022. However, this doesn’t necessarily mean that Logan Paul’s NFT is precisely valued at that amount. NFTs vary in terms of rarity and demand. It’s conceivable that his NFT might be valued higher or lower than the baseline price, contingent upon the prevailing market conditions and the level of interest from potential buyers.

Understanding Market Influences

There are several possible reasons for this huge fluctuation in value. One of them was the general downturn of the crypto market in 2021, which affected many NFT projects too. The crypto market is affected by many things, such as government actions, security problems, technical issues, or public mood. For example, in May 2021, the crypto market crashed after China announced a ban on crypto mining and trading. In September 2021, another crash happened after El Salvador made Bitcoin legal money. These things made many people lose trust and sell their crypto stuff, including NFTs.

Another reason is the oversupply and overload of the NFT market. As NFTs became more popular and profitable, many artists and creators started to make and sell their own NFTs, hoping to get rich quickly. But this also created a problem of quality and originality. Many NFTs were similar, copied each other, or lacked artistic skill or creativity. As a result, many buyers became bored or disappointed with the NFT market and lost interest in buying or keeping NFTs.

A third reason is the lack of real value or use for some NFTs. Unlike other things, such as stocks or bonds, which give you money or interest, or things like gold or oil, which have physical uses or scarcity, some NFTs do not have any real value or function besides their digital image. They depend only on what people think and like about them. So if the demand for a certain NFT goes down or disappears, so does its value.

These reasons show that buying NFTs is not an easy or smart decision. It needs careful research, analysis, and evaluation of the potential risks and rewards involved. It also needs a long-term vision and commitment to hold on to the NFTs through the good and bad times of the market. Buying NFTs can be fun for some people who love digital art and culture or who believe in the future potential of blockchain technology and decentralized platforms. But it can also be sad for others who expect fast profits or easy returns.

Crucial Questions Before Buying NFTs

So before buying any NFTs, you need to ask yourself some questions:

Why do you want to buy NFTs? What are your goals and expectations? How much can you afford to spend on NFTs? How much are you ready to lose? How do you judge the quality and originality of an NFT? What standards do you use? How do you keep up with market trends and changes? What sources do you trust? How do you store and protect your NFTs? What security steps do you take?

Answering these questions honestly and objectively can help you make a better and more rational decision about whether buying NFTs is worth it for you. Remember that buying NFTs is not a game or a gamble; it is an investment that needs knowledge, skill, patience, and discipline.

Read my article about NFT scams: NFT scams directed towards artists on Instagram

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