Would you spend money to buy nothing? Depending on how you see things, that’s what folks around the world are doing, believing that nothing can reap great rewards. Interest and buzz surrounding non-fungible tokens surged in 2021 and it’s hard to ignore its presence, not be curious about something digital, intangible, and inscrutable that gets sold for thousands and even millions.
The idea of NFTs is generally associated with digital art, be it generative collections such as CryptoPunks and Bored Ape Yacht Club or singular art pieces such as Everydays: The First 5000 Days. However, the technology itself can be applied to digital assets such as in-game assets, music, films, event tickets, and even NBA video highlights.
By coding automatic payouts into the smart contracts on the NFTs’ blockchain, artists can be paid royalties on secondary sales. For example, without NFTs, a ticket scalper will keep every dime of profit they get by selling their ticket to someone else.However, with an NFT, a cut of the profits will go to the one who created it as long as it’s coded into the smart contract. For artists, it is clear how this is a huge boon.
However, the barrier to entry gets more expensive as the game gets more popular, and it is unclear how sustainable it is to make a living through the game.There have been numerous rug pull NFT scams, and there is no sign of the scams slowing down. These scams prey on people’s greed and ignorance regarding NFTs and cryptocurrencies, exploiting the highly speculative nature of their prices.