What are the pros and cons of buying NFTs?

Non-fungible tokens are a market that many are still weary about, or have a hard time understanding. A Financial Times reader wrote in asking about what the pros and cons are getting into the NFT market and how to protect themselves from fraud.

According to Financial Times, buyers are at risk due to the misconception that a NFT is about the artwork. Rather, the NFT is similar to a receipt, demonstrating that the buyer is now the “true” owner of the artwork, which is stored on a third-party server. 

Another issue that arises is whether the person creating and selling the NFT has the right to do so. There have been issues with copyright, along with concern about fraud. One piece of advice is to ask the seller or creator to explain the NFT’s functionality. If they refuse, that is a red flag and reason to walk away.

For more information:

See Lucy Warwich-Ching “Opinion- What are the Pros and Cons of buying NFTs? ” Financial Times, August 1, 2020.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

https://lawprofessors.typepad.com/trusts_estates_prof/2022/08/what-are-the-pros-and-cons-of-buying-nfts.html