NFTs simplified: NFTs a line of code that reference what is called “metadata”. This metadata is typically a picture, licensing for the rights to use the picture, or maybe some other contracts. The metadata isn’t the interesting part of NFTs, it’s where that line of code is. That line of code that references metadata is placed into the Blockchain and is permanent, completely unchangeable. This means we soon won’t need proof of ownership of anything, we will all be able to see the transactions taking place on the Blockchain.
What NFTs are good for: right now NFTs are mostly being used to build various online communities and preparing for web3 (the metaverse). Some of them however are using their platform to work as more of a security. Projects like MutantCats is holding onto a treasury that contains other projects inside. Owning a mutant cat NFT means ownership to a portion of that vault. Projects like these are building what is essentially a mutual fund or hedge fund by trading NFTs.
Drawbacks: NFTs are a completely unregulated market which is covered with “rug pullers” (scammers) that will market their project and pull the equity out by simply doing nothing with the project after its initial sale. Not keeping promises to the new holders and leaving them with just a worthless jpeg.
Why I’m bullish on Mutant Cats: Mutant Cats is ran by holders of the NFT. There is a board that is voted for and is put in charge of creating investment opportunities with other projects however major changes are voted on. They are coming up with creative branding ideas, completely redoing their art to include a 3d model for metaverse, while focusing on real world branding and merchandise.
Disclosure: I am a Mutant Cats 🐳 holding 10 for myself. And I ain’t fucking selling.