In a market saturated with various cryptocurrencies that all focus on similar systems, NFTs are making a name for themselves by being an interesting approach to the concept of ownership. Whether you agree with their practical uses on a fundamental level or not, there is no denying that they can be a great investment, especially if you are looking for ways to start growing your wealth.
But are NFTs actually worth buying, especially if you are already invested in cryptocurrency?
Cryptocurrency vs. NFTs
In essence, NFTs are basically an asset in the same way as a cryptocurrency digital coin is. The only difference is that NFTs are entirely unique, rather than being just a single coin in a collective of other coins that form a total currency.
An NFT will often have special characteristics that set it apart from any other asset. This could be a digital image of a character with a unique color scheme and set of accessories or a digital invitation to an event that can only be used by the owner of that NFT. At the most basic level, they represent a unique “thing,” whether that is visually or just through a serial number.
Cryptocurrency is a currency, while NFTs are an asset. Cryptocurrency can be used to purchase things, but an NFT is an item that can be sold to others, whether or not it has any kind of practical value. For example, many NFT video games use NFTs to unlock items or unique characters, making them one-of-a-kind and, therefore, more valuable.
Why Buy NFTs?
There are a couple of reasons why NFTs are a better investment than cryptocurrency, although this obviously depends on the current state of the market and your own personal preferences.
First of all, as mentioned, NFTs are basically just assets, while cryptocurrency is a currency. An NFT can be a “safer” option as a result since you are not usually tied down to one currency – you could even exchange them for real-world cash if you found a buyer willing to do that.
While NFTs can be used in a similar manner to cryptocurrency, you will often find that they have no use outside of ownership, as well as any digital benefits they confer, like characters being unlocked in an NFT game. However, this actually makes them a great asset, since their value is often influenced by how you personally choose to price them.
While this is not always the case, it can create situations where you are able to buy and sell an NFT for profit in the short term rather than having to wait for the value to increase, like with cryptocurrency. Beyond that, it also means that you have more control over how low you are willing to sell it for.
And, of course, buying NFT assets is a great option if you want to diversify your investments. You can hold onto the NFT if it is a really valuable item, waiting until the right time to sell it on. Even if a certain cryptocurrency crashes down in value, the NFT will still have value as long as the asset itself is still usable and sellable.