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Are NFTs a good investment?

  • December 7, 2021
  • 2 minute read
  • Budget Girl
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You may have seen a lot of buzz about non-fungible tokens (NFTs) on social media recently. What’s the fuss? Are NFTs a good investment? Budget Girl has you covered.

What are NFTs?

To keep it brief, an NFT is a digital token that shows ownership of a digital item. This could be an image, an audio file, video, etc. 

How does this tie into the environment?

NFTs are inextricably tied to cryptocurrency generation. They are so new that at this point people are still working with estimates as to how much energy is consumed. 

There are plenty of suggestions regarding making the process more sustainable in the long term. However, right now there isn’t anything concrete to address these energy concerns.

So I don’t actually own anything?

You own a receipt showing that you paid for a digital good. You also have the aforementioned digital item.

Please note that the artist can still retain copyright and reproduction rights. It is entirely possible that someone could have a similar or even identical digital good, but with a different token number. 

This sounds like money laundering!

You’re not wrong. 

What kind of a return am I looking at? 

This is a speculative investment AT BEST. 

Theoretically, a particular NFT could be worth some money to a collector. However, unlike a trading card or action figure, there is no physical ownership. 

Time will tell as to whether NFTs will continue to be popular.

It is entirely possible that you could purchase an NFT and never find a buyer. 

Are NFTs a good investment?

Currently, trends point to “no”. 

Is there some possible merit? 

Sure. 

However, there’s a much bigger likelihood of this being the next beanie baby craze. Don’t invest any money that you can’t afford to lose. 

One last thing: Please don’t be the person who gives their partner an NFT instead of a wedding ring. 

What do you think about the newest investing craze that’s taken over social media? Let me know in the comments!

Want more money focused articles? Check out these ones:

Why and How to Begin Investing with Robo-Advisors

The Pros and Cons of Donating Plasma for Money

My 7 Income Streams – How I make money!

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Disclosures: This website contains affiliate links, which means that if you click on a product link, I may receive a commission. This website is a participant in the amazon services llc associates program, an affiliate advertising program where I earn advertising fees by linking to amazon.com.  The information provided is for educational and informational purposes only and is made available to you as self-help tools for your own use. The information contained is not intended to be a substitute for legal or financial advice that can be provided by your own attorney, accountant, and/or financial advisor.

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