How to Explain NFTs to Your Grandparents This Holiday Season-Cryptocurrency.Mohoagd

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Will your relatives inquire about NFTs this holiday season? Here are the key points to discuss.


Many families will be getting together in the coming days to enjoy the holidays. Family reunions for young people often entail addressing questions about current events that their senior relatives have seen in the news. It could be a political or popular culture reference. 


It could also be a financial issue. Cryptocurrencies and non-fungible tokens are likely to be discussed this year. So, how do you explain NFTs to your grandparents while eating ham and drinking champagne?

    

NFTs are still one of the season's most talked-about topics... and for good reason. They exceeded $10.7 billion in sales in the third quarter of 2021. According to another report, NFT sales could surpass $17 billion by the end of the year.


At a time when many of us are still trying to figure out how to make sense of the ever-changing world of crypto, an NFT craze promises to raise even more perplexing problems. However, as Kevin O'Leary of Shark Tank recently told InvestorPlace, investors may be missing the point. As a result, they miss out on the profits.


If your family fall into this category and are dismissing NFTs due to the misunderstanding, there's still a chance you can help. To help you explain NFTs to your grandparents, InvestorPlace consulted with a number of specialists. This is what they had to say about it.


The Holiday Guide: How to Explain NFTs


Matthew Le Merle, Managing Partner of Blockchain Coinvestors, once told InvestorPlace that NFTs should be renamed "digital ownership certificates for rare goods." However, because that doesn't exactly slide off the tongue, a new phrase was required. Enter a token that isn't fungible.


It's crucial to clarify what that entails to your relatives who aren't familiar with the situation.


Lyle Solomon, a partner at Oak View Law Group, took the phrase in stride and broke it down. "The term 'non-fungible' simply means that something is unique and cannot be replaced." This, according to Solomon, is similar to the fungibility of a dollar bill. To put it another way, any dollar bill can be traded for another. With NFTs, this is not the case. Each one is distinct.


So, what about the non-fungible token's second part? "A token is a digital certificate maintained on a blockchain, [which is] a secure and distributed database," Solomon added.


Compare NFTs to What Your Relatives Know


Once you've mastered the fundamentals, you can compare NFTs to other sorts of investments that your family are more likely to be familiar with. Solomon also has a good example of this: digital art. In addition to being a traded asset, your NFT can be used as a wallpaper for your smartphone (or tablet).


"NFTs are like digital art," Solomon explained. "Instead of receiving a Christmas card that is an artwork on canvas, you will receive a computer representation."


What makes investors so enthusiastic about NFTs? If your grandparents are having trouble understanding the hype surrounding a CryptoPunk or Bored Ape Yacht Club NFT, Hossein Azari, CEO and founder of CMORQ, suggests reminding them of other popular collectibles.


"NFTs are like baseball cards, but digital," Azari explained, recalling the famed T206 Honus Wagner card and the 1951 Bowman Mantle card for example.


Consider the baseball cards that sell for $6 million each if your grandparents are having trouble understanding how digital artist Beeple sold an NFT for nearly $70 million. Although not everyone will consider these items to be worth millions of dollars, some buyers will.


Focus on Value Appreciation


Okay, you've gone over the fundamentals and explained why some of the prices are so high. But can you tell me (or your grandparents) why investors are buying NFTs in the first place?


According to Jonathan Teplitsky, CEO of Pipeline Marketing, it's not all that different from stock investment. Many investors purchase stocks with the goal of holding them for a long period, if not a lifetime. Some people even pass their investment portfolios down to their children or grandchildren. The hope is that the stock would rise in value over time.


"Many people who buy NFTs are buying a piece of art in the hopes that it will appreciate in value," Teplitsky explained. "Instead of storing your proof of ownership on a piece of paper under your bed, like you would for a stock, your ownership rights are stored online – ensuring that you never lose it."


Want to Learn More?


There has never been a better time to learn about NFTs or to teach others about them. O'Leary has been financing startups in the NFT industry, betting on a decentralized future. Garry Kasparov, the former world chess champion, just created an NFT collection that allows fans to invest in his legacy. NFTs have been issued by artists ranging from Grimes to Shawn Mendes to Kings of Leon.


Despite the fact that 2021 was a record year for digital assets, many experts are looking ahead to the future. That's why the holidays are an excellent opportunity to assist your loved ones in overcoming their bewilderment. Although not everyone needs to invest in NFTs, knowing their disruptive potential is critical.


InvestorPlace Assistant Financial News Writer Brenden Rearick says that "the safest approach to ensure NFT gains is in the underlying currencies themselves" if you're wanting to invest. In other words,


Samuel O'Brient did not hold any positions in the securities referenced in this article at the time of publishing (directly or indirectly). The writer's views are his or her own, and they are subject to the InvestorPlace.com Publishing Guidelines.


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