Is NFT the Currency of the Future?

NFT

 

Digital currencies are booming. Bitcoin is undoubtedly the most popular of its kind, but the last variant that joins the list is the so-called non-fungible tokens (NFT). Until recently, NFTs were still relatively unknown to the general public, but that has recently changed, especially after being promoted by an NFT marketing agency.

On March 11, the well-known gallery and auction house Christie’s sold an NFT of Everyday: The First 5000 Days, the digital artwork by the American artist Mike Winkelmann, also known as Beeple. The digital collage, consisting of 5000 images, went over the counter for a record amount of 69 million. Since then, the ball has been rolling heavily for NFTs. But what exactly is a non-fungible token?

What is an NFT?

NFTs basically expand the understanding of scarcity within the online world. Before their arrival, the cost of copying a digital object was virtually non-existent, but that was now being changed. Using blockchain technology, NFTs are linked to a digital object. Through this technology, it is then possible to buy and sell (expensive) digital collectibles. A well-known example is the first tweet posted by Twitter CEO Jack Dorsey, which was sold for 3.8 million.

‘Non-fungible’ means that it is not possible to put different tokens on an equal footing with each other. Each NFT acts as proof of authenticity for the digital object to which it is linked. It, therefore, shows who owns a digital object. It can be about a digital artwork – such as Beeple’s work – an audio file, a recording of an NBA game.

Of subjective value

A new digital currency. But why would you choose an NFT and not opt for the popular bitcoin, for example? What exactly is the difference between the two? “Bitcoins can be equated with each other and NFTs are not, that is the biggest difference,” says Jean-Luc Verhelst, author of the book Bitcoin, the Blockchain and Beyond, speaker, trainer, and advisor on blockchain and crypto assets. “NFTs can’t do that because every token is unique and linked to a specific digital object. A second distinction is that the value concept with an NFT is much vaguer than with bitcoin. Its valuation is entirely subjective. Just like with a painting, it depends on one’s own preference, so what one does or does not like.”

For that reason, artists or artists, in particular, are currently the major players in this domain. NFT has become a real hype in recent months. It now reaches a rather wide audience and no longer only circulates among the geeks. “Maybe in the future, we can even visit fully digital museums where crypto art can be viewed.”

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Deepening in the NFT

At NFT, both high risk and high reward are possible. But it does require some knowledge before you can get started with it, verhelst warns. “I don’t recommend NFT more than anything else, but why not try to delve into it too? It is not something that one completely captures by spending one hour working on it. People who show interest in it, I recommend starting small. This way you don’t lose a large amount of money overnight.”

Not that you are necessarily in real financial danger if you go on the NFT tour. Although you always have to be careful with it, as you would with any kind of currency. “I’m not aware of all the potential dangers surrounding NFT – there will be a number of pitfalls – but the blockchain platforms on which those NFTs are traded already work well enough,” the author notes. “However, you currently have to take into account the transaction costs that are fairly high, they can quickly amount to tens of euros.”

Most trading platforms charge users a transaction fee for processing and validating a transaction on the blockchain, and sometimes an additional fee for selling and buying an NFT.

More NFT in the future?

“You should also know that, although the NFT is always unique, this does not necessarily mean that the experience of beauty that one experiences with a certain digital work of art is also completely unique. Although it is not possible to find the exact same digital artwork online, it is conceivable that a copy based on a photo of it can be found. This allows you to ask yourself whether the experience is still so unique, or worth the cost.”

With a view to the future, it looks like the NFT will continue to boom, concludes Jean-Luc Verhelst. “Today it is art, but in the future, more applications will enter the world of the NFT. For example, the housing market or the clothing industry. Think, for example, of Nike, which would release a limited edition sneaker via NFT because, based on the linked NFT, there is proof that the sneaker is not a copy but a rare object.” On top of that, it’s no secret that corona caused society to digitize at lightning speed, and these NFTs will certainly play a major role in that.

 

Loan To Invest – Factors To Consider

In a perfect world, each one of us would have sufficient or an abundance of money to fund all our needs and wants. But, in the real world, a lot of us require borrowing funds to accomplish our goals whether small or big. Fortunately, there are lenders and financial institutions that offer loans for us to carry out and fulfill our goals.

In Norway, for instance, smålån på minuttet or small loans per minute are offered by various financial institutions. These small loans are unsecured and typically amounts from 5,000 kroner – 100,000 kroner, however there are others that offer small loans with higher amounts with payment duration of 1 month to 180 months.

These smålån på minuttet, similar to other small loans from other lenders and financial institutions, could be used for various purposes such as covering emergency expenses, paying off medical bills, for household expenses, repairing a vehicle, for home renovations, repairs or remodeling, for making large purchases such furniture and appliances, or perhaps for funding a trip.

Factors To Look Into When Getting A Loan To Invest

While personal loans could be used for such purposes, some apply for a personal loan to make a solid investment to build up wealth. Yes, many take out loans to invest. However, there are factors to consider when taking out a loan to invest in the market so as to make the most of it. Below are some:

  • Look Into the Interest Rates of the Loan. It is always important to look into the interest rate of the loan offered by the lender. Earning high revenues on your investment isn’t at all good if a big portion of it would go the repayment of high interest loans. You won’t earn much if this is the circumstance.
  • Check on All Imposed Fees. Apart from the interest rate, some fees may be imposed by lenders offering loans. Even though it’s only a few dollars every month, every dime and nickel count when it comes to eating into the returns of your investment.  Hence, it is imperative to check all the fees that comes with your loan.
  • Assess the Payments. When getting a loan to make an investment, your objective is to have regular, continuous and sufficient returns so you could repay your loan. If your investment approach is to buy and hold for long term, you may have to wait a while longer to see any returns. If this is the instance, it is crucial to make certain you could manage to make the loan repayments as you wait for your returns.
  • Study the Performance of your Investment. It is never a great idea to venture into the stock market or any other forms of investment without you making an in-depth research. You will have to carefully look into how it performed since the date of its inception and not only how it performed for the few months.

Although possible, making use of personal loans to make an investment could be a huge gamble and not for people who lacks the courage to take this gamble. Prior to taking the plunge, analyze every aspect of the loan and the investment to ensure you are making the right choice.