Why are NFTs Harder to Trade?
By Space Coast Daily // June 29, 2022
Non-Fungible Tokens (NFTs) are unique pieces of art in digital form. Their trading on https://bit-iq.de is very similar to cryptocurrency except for their uniqueness, and that’s what the non-fungible represents. Recently, the market of NFTs has shown vigorous trends in the NFTs trade. NFTs are like arts of the Mona Lisa and the Last Supper in the crypto era.
With the boom come complementary resistance. Due to their uniqueness, very few people understand them and face difficulties in trading NFTs, which this article is all about.
Understanding NFTs Trading
Before discussing difficulties in trading NFTs, first, let’s have a glance over the trading process of NFTs. These tokens are artworks of the crypto age but have no similarity. Its marketplace has a structure integrated with common trading platforms like eBay.
The largest marketplace is OpenSea. Auctions take place to sell NFTs, which leads to high selling prices. These marketplaces also offer to the mint of NFTs, which is creating newer ones. It directly reflects the primary purpose of NFTs to provide a platform for digital artists to sell their artwork to their clients without any hindrance.
Difficulty Factors in Trading NFTs
There is a fee structure for each marketplace that offer NFTs trading. It includes an account registration fee, minting fee (if applicable), sales fee (commission for marketplace), and a royalty fee that goes to the actual creator of the NFTs.
Some of these marketplaces are not transparent in defining their fee structures. As a result, traders experience unknown deductions in their returns. It is not the marketplace every time, but also, most of the new traders skip the fee structure section or don’t bother to search for it. They end up paying the ‘penalty.’
Less Probability of Profits
Trading any commodity, whether physical or digital, is to make profits. The difficulty faced by most traders, especially the new ones, is understanding the market trend of NFTs. Usually, on the release of a new product or a car model, people buy it for a high price, and later on, it gets higher and higher once the unique aspects are open to the world.
In the case of NFTs, it is a bit unpredictable. Most traders buy newly minted NFTs and expect to get higher returns. Less than 30% of these traders get a profit, and the rest lose an estimated 50% of their investment. Similarly, when trading in standard scenarios. It reflects the complex nature of the NFTs marketplace and trading there. This trading is more complex than another trading of the bitcoin era.
Every marketplace has quite a large number of defected factors that deal in fake product lines. The same goes in the NFTs marketplace. Some traders buy NFTs that have no value as they are either fake or someone sells them NFTs that are not in his ownership. The worst side of the marketplace is the anonymity that results in unbale to track these harmful factors in the marketplace.
The traders spend a part of their fortune buying a digital asset, either as a bluff or a fake one. The result is a total loss in the investment. It brings unreliability to the marketplace and brings limitations to traders due to security purposes.
In conclusion, the ecosystem of NFTs lack factor that can promise assurance of validity. The lack also results in a loss of value for most artwork. The overall image projection of trading NFTs goes down due to unreliability in trades. The NFTs domain is a booming sector. There is a dire need for validation acts and measures to ensure the validity of the digital assets.
A marketplace needs to bring in new customers and traders for its growth. The growth of the NFTs marketplace is experiencing adverse effects due to these factors, incredibly fake NFTs and related frauds. Offering a secure platform for trading NFTs is the only solution to resolve hurdles in the trading of NFTs.
There is a brighter future ahead for the blockchain community ahead. The resolution of the setbacks, as mentioned earlier, will bring more players to the market. It will result in greater competition, leading to better trades and experience.