NFTs Aren’t Scary

10.31.2022
Shaan Kooner

Shaan is the Community Manager at ethos. He has a passion for building community and has been interested in blockchain technology from an early age.

1. NFTs are bad for the environment

This is a misconception that is often quoted in headlines, social media posts, and in conversations. The truth is that not all NFTs are bad for the environment, and it all really depends on the blockchain that the NFT is issued on. Certain blockchains have a larger environmental impact than others, and it all depends on which chain the NFT issuer chooses for their project or collection. This is sort of like making the statement that all cars are bad for the environment. While this may be true for gasoline or diesel-powered vehicles, there are vehicles out there that are eco-friendly, like those that are powered by electricity or hydrogen. When it comes to environmental impact, the issue is not with the idea of the car itself, but rather, what’s powering it under the hood – and NFTs are no different. If you’d like to learn more about NFTs and sustainability, you can check out our article on this topic here.

2. NFTs are correlated with Cryptocurrencies

Another common misconception is that NFTs are correlated to the Cryptocurrency market. This isn’t true. Although it’s true that NFTs gained popularity while primarily being bought and sold with Cryptocurrencies, this does not mean that every NFT necessarily has to be tied to it. NFTs are tokens that track and prove digital ownership, and they are something separate from crypto altogether. Cryptocurrencies were the sole method of buying and selling early NFTs, which contributed to their decline during the cryptocurrency market downturn. As the space continues to grow, buying and selling NFTs using credit cards will become more popular, further separating NFTs from the cryptocurrency market. NFTs are often viewed as digital assets whereas Cryptocurrencies, as the name suggests, are a form of currency. It’s sort of like if you were to buy a painting using Euros. If the price of the Euro went down, it wouldn’t change the value of the painting. The painting holds value independent of any one currency, and you could easily sell it via USD or another currency.

3. NFTs are useless

NFTs are a cutting-edge technology, and their full potential hasn’t been realized yet. The value of an NFT is typically dependent on the utility that it provides the holder, and therefore the “usefulness” or lack thereof is completely in the hands of the issuer of the NFT. For example, many brands have packed their NFT campaigns full of value, granting holders perks such as free merchandise, access to exclusive events, and early access to new releases, which has resulted in their NFTs retaining and providing value to their customers. NFTs can be so much more than cool profile pictures, and they can be used for things such as:

  • Creating branded digital wearables
  • Granting customers access to exclusive brand events and experiences
  • Allowing gamers to own in-game items and trade/sell them on a secondary market
  • Offering blockchain-based digital identification
  • Issuing event tickets on the blockchain

We hope that this article has cleared up any misconceptions that you may have had about NFTs. We’d love to answer any additional questions that you may have, so feel free to reach out at hello@ethosnft.com.

Happy Halloween!

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