NFTs become the thing to own as the world embraces the metaverse.

Introduction about NFTs

  • NFT is Non-fungible token
  • Cryptographic tokens that are one-of-a-kind and cannot be duplicated on a blockchain
  • Can serve as a medium for commercial transactions

Why are people buying jpegs and gifs?

  • Once they buy a NFTs, they will receive a code that can be used to make an item unique, and the ‘digital deed’ or token cannot be replicated which proves one’s ownership of that digital asset.
  • NFTs operate on blockchains such as Ethereum and Matic, which have a wide range of applications. Artists use them to demonstrate ownership of their digital art, which frequently includes JPEGs or GIFs, paintings, audio or video files, or any other sort of digital asset.
  • NFT collectors are able to list and sell their NFTs on a marketplace, exactly like creators. A royalty is given to the original developer each time the token changes hands.
  • NFTs provide a way to create and trade digital assets that are not subject to the same volatility as cryptocurrencies.

Some risks to NFTs?

  • Proof of work (PoW) is an algorithm that is designed to increase the security of the blockchain.
  • It has an environmental impact as through the process of solving out the hash, Ethereum uses as much energy as several countries.
  • Some content security risks as there’s no legal definition of NFTs globally.
  • No permanent storage solution for NFTs.

Thoughts about the NFTs fad or future

Value of NFTs in the future

  • It enables the separation of tangible assets into fractions by producing digital signatures for them.
  • Faster real estate acquisitions and the sharing of real estate prospects may enable more people to invest.
  • Market efficiency as it may allow for smaller investments into big projects with a simplified process.

Disclaimer : AutoML Capital is a Type 9 (Asset Management) and Type 4 (Advising on Securities) licensed corporation under the Hong Kong Securities and Futures Ordinance (“SFO”). AutoML Capital only provides investment advisory services to Professional Investors as defined under SFO. It does not provide such services to the public and nothing contained herein should be construed as an offer of such services.
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