NFT digital arts have made headlines when transactions are settled in astronomical figures and people making a fortune buying and selling NFTs. The NFT fandom grows stronger with the various discussions and tutorial videos on the internet. Many celebrities and influencers are buying NFTs, and changing their social media profile pictures to NFT arts. NFTs have become a sensation within a short period of time, with many considering them to be great “get rich quick” tools. Yet, the risks involved in NFT trading are not to be overlooked.
NFT is an emerging virtual asset. Through blockchains, issues such as the proof of ownership and buying and selling of virtual art and collectibles are resolved. Yet, the price of NFTs is highly volatile, valuation is difficult, and liquidity can be low. In other words, one may not be able to sell an NFT after purchasing it. Added the risks in terms of trading platforms, digital wallets, their cross-border nature and lack of regulation, NFTs are undoubtedly very risky. Moreover, fake NFTs, thefts and frauds are not uncommon.
While we are aspired by technology developments, do not forget about the bubbles in the past. If you are interested in NFTs, do your own research and make sure you understand the features and risks involved. Do not follow others blindly!