Before deciding to invest, let’s get to know NFT – the trending digital assets on the market — whether it’s similar or different from cryptocurrency? Is it worth the risks? A lecturer from Chula Business School offers his advice and warningson investing in NFTs.
An NFT is a new form of digital asset that has been gaining attention, especially in the past few years. The news on how the first tweet of the world was auctioned for $2.9 million US dollars and the news on how Christie’s, a world-class auction house, sold Beeple’s NFT entitled “EVERDAYS: THE FIRST 5000 DAYS” for 2,204 million Baht, along with celebrity NFT owners, have all contributed to an NFT fever. Artists and creators in all industries from art, photography, entertainment, game, fashion, and music, to other creative fields, are keen on having their originals minted and sold on NFT marketplaces. Investors are also becoming more interested in investing and hoping to profit from NFTs. thailand university
Before jumping on the NFT train, Assistant Professor Dr. Roongkiat Ratanabanchuen, a lecturer from the Department of Finance and Banking, Chula Business School, offers some advice for enthusiasts and investors for this particular form of digital assets. It is a good idea to learn the definition of an NFT, know the differences between them and other digital assets, and be informed on the risks involved so that one can avoid falling victim to online investment scams as often seen in the news these days.
What is an NFT? How is it different from other digital assets?
NFT stands for a non – fungible token which is a form of digital asset that has a unique identity and cannot be substituted. Though considered a cryptographic asset, it is different from cryptocurrencies, like bitcoins or ETH, which are fungible tokens, exchangeable and substitutable. To put it simply, though the identity of each cryptocurrency coin is unique, the value is always the same. Therefore, a coin is substitutable in the same way foreign currency exchange works.
In the case of NFTs, each ID uniquely represents a particular token. That is to say, its originality can be authenticated, and this is why NFTs are used for digital artwork, music, audio and video files, games, and even virtual land in the Metaverse. An NFT gives its owner the exclusive right to access the token. The ownership is automatically stored on a blockchain (a network that records online transactions) and cannot be altered. The structure transparently verifies ownership of each NFT.
Let us look at how to mint and trade an NFT. Say you have an image file that you would like to turn into an NFT, you can choose to do that on one of the many NFT platforms such as Opensea, Rarible, and Foundation. Your NFT can then be bought with cryptocurrencies and stored in a digital wallet like other digital assets.
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