Authored by Mr. Vijay Pravin Maharajan, Founder & CEO, bitsCrunch
The famous modern philosopher Henry David Thoureau once said “Every generation laughs at the old, but religiously follows the new”.
When one considers how the internet and Web 2.0 changed the way we think about connecting with one another, that certainly rings true.But there is a new agent of change on the block. And it is one that has seen a lot of traction with the new generation of tech-savvy young adults this past year.
Winds of Change - NFTs and the Youth
Blockchains, NFTs and the metaverse have become household names since 2022 began.
They have attracted a lot of young investors into the fold, while also helping brands engage with their younger consumers in many unique ways.
Young adults interested in NFTs swear by their vast potential for growth. They vouch for their scalability and of course, as an asset class that is known for providing great returns on an investment.
It is not surprising that a lot of NFTs and blockchain-based projects have attracted a lot of investments in 2022. Weekly sale volumes for NFTs are skyrocketing, with an increase from 100 sales in 2017 to nearly 50,000 in 2022.
A single month in 2021 recorded over 1.5 million NFT art sales!
2023 is set to create more opportunities for growth in the blockchain and NFT sectors.
With a lot of big players and a lot of firepower under the hood, blockchain platforms are set to create even more NFTs based on unique concepts.
The most expensive NFT ever sold is an interesting example of this, with artist Pak’s The Merge selling blocks of an abstract space in the metaverse. As more artists think of unique concepts with increasing value propositions, it is easy to see how NFTs can be a very engaging - and lucrative - investment.
With new NFT concepts on the horizon, young adults are likely to find great opportunities to grow their wealth, in a way that is meaningful to them.
How Can NFTs Be Safeguarded?
Perhaps the vast potential for great returns with NFTs sounds too good to be true?
Well, the sad truth is that there are those who look to make a quick profit off of the blockchain with no regard for the people who are harmed by their actions.
Rug pulling, wash trading, scams and fraud are an unfortunate presence on blockchains. Investors are often short-changed by these practices, losing out on their investments while others reap the benefits.
Coupled with a regulatory environment that is yet to find its teeth, NFTs carry a lot of risk to offset their potential for high returns. However, there is nothing that cannot be solved with due diligence. Understanding each NFT and its collection’s unique value proposition while analysing its trends and token allocations can be very helpful in safeguarding against projects aimed at exploiting investors.
Looking at the tokenomics behind a new project and the manner in which its tokens are allocated to various parties can shed a lot of light on its owners intentions. Collections that originate as a result of conflict - or simply copy another collection - are ones to watch out for, as they may not get the traction necessary for them to achieve results.
Staying up to date with industry trends and news is highly recommended.
With a bit of homework and research, a young investor in NFTs could essentially act as their own guardian angel, and make decisions that are potentially rewarding as a result. 2023 is sure to bring in more innovations - and more investment potential - to blockchains and NFTs.
It is up to young investors to make the most of their immense potential, while also remaining cognizant of their pitfalls.