A Layman’s Guide to Investing in NFT
Everything you should know before buying an NFT
Some months ago, I stumbled on an NFT article but at that time it made zero sense to me. I mean, I didn’t understand it at all.
I was talking to a close friend about it. As a photographer, I learned it NFT could be another way to make money from her art. I entered my “research mode” and tried to get my hands on all the videos and articles I could get.
But I was discouraged by how expensive gas fees were to list an art on a popular NFT marketplace. Although now that I know better, I know it takes more than listing your art(even if you can afford the gas fee and all)
Not knowing how else to move forward, I did what any lazy person would do. I forgot about NFTS and focused on other aspects of my career.
Fast forward to three months after, I own nothing less than 7 NFTs. All quality projects I can vouch for. One of them is worth 1 BNB as of the time of this writing.
Well. A lot of things.
I realized it’s better to jump in on a train when it’s not overly crowded.
If you knew Bitcoin would be worth this much, wouldn’t you have done anything you could to get your hands on one, two, or maybe even three😜?
That’s exactly how I feel about NFTs.
Not just NFTs.
The whole blockchain is a hot space right now and it’s only wise to position yourself for what is to come.
NFTs| Defi | Dao| Web3. It’ll blow up the internet and it’s only a matter of time.
These things are still very new to third-world countries but they’re getting mainstream in other parts of the world.
When I mean position yourself, I don’t mean learning blockchain development (although, that’d be an added advantage if you have the skill) but I’m talking about basic knowledge of how all these are interconnected. How it works.
It’s hard to believe how some people still do not know how to operate a Cryptocurrency platform at this stage. (Am I throwing a jab at you? Yes I am!)
The world is moving on to Decentralized finance and you still act nonchalantly about basic crypto knowledge.
I’ve had several people show interest in NFTs recently, mostly because of the testimonies people are getting from it. But it’s hard to put you through when you’re not familiar with how some platforms work.
Yes! I can share links to NFT giveaways but do you know how to get your wallet address?
There are tons of YouTube videos on how to use these platforms. Please watch them. Get familiar with them🥴
Yes, I understand how crypto works already but I’m clueless on how or where to buy NFTs?
Calm your horses
What exactly are NFTs?
NFT are digital assets. Or in a simpler form, they’re certificates of ownership to any digital asset you buy or own and it’s secured on a blockchain.
NFT means Non Fungible Tokens.
That’s not so helpful, right?
Well, what that means is: NFTs are not interchangeable.
If I have a thousand dollar note and you have Two five hundred dollar notes, we can both exchange it and it’d still be the same.
Same thing for Bitcoin. Bitcoins can be exchanged
So an NFT is effectively a digital asset that can be traded — but it’s non-fungible: 10 different NFTs will have 10 different values.
Another illustration people use is the popular MONA Lisa painting.
Mona Lisa is a blown painting! Everyone knows it. You’ve either seen it as a meme or it randomly appeared somewhere.
But the funny thing is, the original painting is sitting somewhere in France right now, and it’s worth over 800 Million dollars.
Imagine getting this information now and going to Google to save an image of Mona Lisa, print it out, and decide to sell it for a million dollars.
But you obviously can’t do that because you do not own its certificate of ownership which is the only way to certify that it’s an original painting by Leonardo Davinci.
And as a beginner, it’s easy to think NFTs are all overpriced images or art on the internet.
But NFTs are more than art. NFT can be anything. Remember the explanation about the certificate of ownership?
As long as you’ve paid, NFT is the unique token. Your ownership claim whatsoever asset you get.
Can be an image, or music, a ticket to a concert, or even a digital course!
Why do people collect NFT?
At its core, a lot of the psychology around collecting is similar to the reasons humans have sought collections for years.
A psychologist, Mark McKinley cites several reasons which I can’t but agree with:
Investment: Desire to find an asset that will appreciate in value
For some of us, NFTs are more of an investment. I buy for $15 and sell it for $600
Or minting an NFT for $25 and selling it for $1500.
Yeah, people make that much from NFTs.
Social Expansion: Desire to expand social lives and social signaling.
Sense of Self: Desire to create and maintain a sense of identity.
For some, its just like owning the latest iPhone. What they gain is a sense of identity. To them, it’s a social currency. A way of belonging
Regain Control: Desire to build a comfort zone through secure possessions.
To some, it’s for long term. To Them, it’s like buying a real estate property that’ll help them get financial freedom later on.
Now that you know why you’re buying.
Where do you buy it?
The most popular marketplace for NFTs are :
Opensea: OpenSea is a marketplace for NFTs that operates on Ethereum. Users can interact with the network to exchange non-fungible tokens for cryptocurrency.
SuperRare: is a social network for NFTs. Each piece on the platform is unique, and users can buy and sell these original pieces on its website.
How do you buy?
1. Purchase Ethereum
Since most NFTs are Ethereum-based tokens, most marketplaces for these collectibles accept only Eth tokens as payment. If you already have an account with a cryptocurrency exchange, you can purchase Ethereum on it and send your crypto to your MetaMask wallet.
P.S: I’m using Ethereum because most NFTs are built on the Ethereum blockchain. But there are Solana NFTs, Smart
2. MetaMask is an Ethereum wallet available via chrome extension and mobile app. To sign on to OpenSea (and other NFT platforms) you’ll need an Ethereum wallet. Simply download MetaMask, set up a wallet and send over the ETH you just purchased from Binance or any other crypto platform.
3. Buy Your NFT
It’s an easy process to buy an NFT once you’ve funded your account. Most marketplaces are in an auction format, so you’ll need to submit a bid for the NFT you want to purchase. Some marketplaces operate more like an exchange, using the highest bid and lowest ask for NFTs that have several prints.
A benefit of purchasing an NFT from the primary marketplace is the potential resale value directly after the product goes on sale. Some NFTs that are in high demand will sell for 5 to 10 times their initial price right after the release
Now that you know WHY you want to buy an NFT, how do you spot good NFT projects?
The hidden truth about NFT is: it’s driven by DEMAND
This is why you want to only buy NFT that has a driven community.
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