A New Era of Digital Goods
The world of Crypto art and Non-Fungible Tokens (NFTs) is just starting. With lots of innovative ideas and technology, timeless pieces and groundbreaking works are sprouting up faster than anyone can wrap their head around. An era of digital goods has arrived, and the pioneers and collectors are here to stay.
Any new artist or collector trying to navigate this brave new world may find themselves drowning in new information. So, before any budding newcomers take their first step into the world of Crypto art, here is a list of frequently asked questions that will provide some clarity on the journey forward:
Q: “Why would I purchase a piece of online art when I can right-click save it to my computer? Why would I buy this if I can just look at it in the gallery?”
A: Why would you want to purchase an online video game if you can just watch it on Youtube for free? Why would you want to purchase cosmetics in said video game if you can see everyone else’s avatars sporting those cosmetic goods? What stops you from going to visit the Mona Lisa in public? From seeing Mount Everest? Why do you go see it if you can just see it online from the countless people that have taken a picture of it and digitally edited it?
First and foremost, purchasing Crypto art and NFTs supports the artists, the developers, and the publishers. In the past, artists had difficulty monetizing their digital art on the internet — it was too easily copy and pasted. Through NFTs, art, and other assets, can be truly authenticated by the artist, the developer and publishers through minting their assets permanently on the blockchain, creating implicit scarcity. That’s what gives these digital pieces value — authenticated scarcity. For the same reason that the original 1/1 Mona Lisa is valuable, and a print-out is worthless. The original is housed in the Louvre, has been confirmed to have been painted by Da Vinci, and is verified scarce, only having the single copy. Now it can all be done through NFTs!
Furthermore, in this new world of cryptocurrency, NFTs go beyond just supporting an artist or developer. When you purchase something from a person through the NFT market, you are actually purchasing something that you verifiably own; something that you can resell later down the line or hold onto for as long as wanted. No company can ban you and take those items away from you after you’ve purchased them. They really are owned by you.
Q: “What stops me from grabbing someone else’s work and just putting them up in these online shops?”
A: Nothing. Nothing stops you from stealing another person’s work. But, the authenticity of the piece is what makes it valuable, as previously stated. If you were not the owner, the original creator of the art, the meme etc… then your piece is worthless. Would you purchase a known counterfeit Pokémon card? Sure, you might trick one or two people, but crimes go hand-in-hand with punishment. You’ll likely be in legal trouble due to copyright and trademark laws. The Blockchain is immutable. Everything is recorded and can be tracked online for as long as it is run. A quick search online will reveal the truth sooner rather than later. Most platforms will shadow ban you from minting anything further if they see your NFTs are stolen.
So, with that out of the way let’s get into what makes this world revolutionary and why this could be the next biggest thing since sliced bread.
What is “Fungibility”?
“Fungibility is the ability of a good or asset to be readily interchanged for another of like kind.
- Like goods and assets that are not interchangeable, such as owned cars and houses, are non-fungible.
- Money is a prime example of something fungible, where a $1 bill is easily convertible into four quarters or ten dimes, etc.”
Source: https://www.investopedia.com/terms/f/fungibility.asp by JAKE FRANKENFIELD
What are Non-Fungible Tokens (NFTs)?
“Non-fungible tokens are used to create verifiable digital scarcity, as well as digital ownership, and the possibility of asset interoperability across multiple platforms. NFTs are used in several specific applications that require unique digital items like crypto art, crypto-collectibles and crypto-gaming.”
Sub-source: “Enjin is Creating a Real-Life Ready Player One, and It’s Powered by Blockchain”. VentureBeat. 2019–04–16. Retrieved 2019–08–14.
The digital world is creating a source of revenue from items that are similar to that of owning a house. It is your property, your responsibility and, ultimately, your profit to be made down the line. Any piece of art or token you purchase that is not directly a cryptocurrency is non-fungible.**
**with a few exceptions not listed here
All credits belong to Mark Cuban for this screenshot.
You are the owner of the assets you purchase on the blockchain. When you make a transaction on the blockchain to purchase any kind of NFT you are now the proud owner of that NFT. This can be proven through what is called “The Transaction Hash” found, generally^, on a website called etherscan. And even with the item just being in your wallet, shown on places like Opensea or on the NFT market you purchased the asset from! And with most collectible items you purchase or invest into, they will very likely return some money down the line. None of this can be taken away from you; the most that may happen, if purchasing a counterfeit, or if purchasing from someone untrustworthy, is the image. Which then gets lost from the lack of a hosted server, or from the shadowban of that person and their assets. But you will still own that token, which can still be verified through etherscan.
^There are other blockchains that may use other websites for their transaction hashes.
This is not a “You’ll get rich quick” scheme, this is the nature of a new, fresh market as well as what may very well be the future of markets. Who knows what may come down the line.*
*None of this is financial advice. Please be very careful and do your own research on anything you will ever invest in.
There are a ton of wallets that you can use to hold your cryptocurrency and even some that will allow you to hold NFTs in them!
Credits to Opensea
The fan favorite to use is Metamask: https://metamask.io/ This browser-based wallet can be used in Chrome, Firefox and Brave. This is where you will store your goods and where you will make a majority of your purchases.
KEEP YOUR PRIVATE KEYS AND PNEUMONIC SAFE, AWAY FROM ANYONE. THERE IS MONEY INVOLVED WITH THESE WALLETS, SO PLEASE KEEP THEM AS SECURE AS POSSIBLE WITH A STRONG PASSWORD AS WELL!
A hardware wallet could come in handy, so consider purchasing one for your digital assets you’d like to see in cold storage. These hardware wallets are extremely hard to crack and very safe. Lots of 2-factor authentications that will alert you to anyone trying to meddle with them.
Each of these wallets requires Ethereum to run; the main cryptocurrency that these upcoming markets run on. How might one buy Ethereum you may ask? Well, metamask has direct purchase using credit card if you’d like, or if you wanted to use an exchange there are a variety of them you can use such as:
Binance: https://www.binance.com/ (Very popular)
Coinbase: https://www.coinbase.com/ (Very Popular but heavy fees)
Kucoin: https://www.kucoin.com/ (Easy spot trading but interface can be hard to understand for beginners)
If you purchase on an exchange you will have to send your ethereum to your wallet address. If using Metamask, you can find this address at the top:
WARNING: Sending cryptocurrency is quite sensitive! Only send currencies to wallets that support that currency! And if sending back to an exchange please make sure it is the correct cryptocurrency as you will lose all your money if it is not!
It is important to note that leaving funds on exchanges is generally considered riskier than having your funds in your own wallet. Funds held in exchanges are not truly your funds, as they can be seized, or the account locked by the developers. Furthermore, they are often a target for hackers, which could mean unnecessary risk for your assets.
The Ethereum blockchain runs on gas, much like that of a car. Every transaction you make will require you to pay a gas fee, similar to that of a tax fee. Buying, moving nfts through wallets, moving cryptocurrencies through wallets, etc… will cost gas. Without getting too technical again, certain actions on the blockchain will be much more expensive than others due to the size of the ‘smart contract’ you are executing, but that is something you’ll figure out along the way. As an example, sending funds from one wallet to another is a relatively simple and cheap transaction, whereas minting art would require more smart contracts to deploy and would be generally more expensive. And it can get quite, quite pricey if the network is congested, which can happen during periods of heavy demand. You can always check gas prices here: https://ethgasstation.info/ The lower, the better.
How to calculate gas costs:
NEVER MESS WITH THE GAS LIMIT The blockchain already has most of this calculated out for you, the most you have to mess with is the GAS PRICE.
In general, the higher the gas price you pay, the quicker the transaction will process, and vice-versa. Issues will sometimes arise with Ethereum, where too much demand will send gas prices skyrocketing. This may make it too costly to transact for a period of time.
WARNING: USING THE BLOCKCHAIN REQUIRES A SMALL AMOUNT OF ETHEREUM IN YOUR WALLET TO AVOID ERRORS. IF YOU SEE A $1K + TRANSACTION FEE IT MIGHT MEAN YOU DO NOT HAVE ANY MONEY IN THAT WALLET.
So, you’ve got your first bit of Ethereum and you want to browse the markets, eh? Well look no further! Some of the more popular markets include, but are not limited to (not in any particular order):
Markets with Free Minting (No application needed).
Opensea — Requires a one time gas fee before free minting.
Opensea Discord: https://discord.gg/Y83Szjuscq
Mintable — Has an option for truly free minting, no Ethereum needed at all. Directly upload your photo or digital art piece, fill in the information asked, and that’s it!
Mintable Discord: https://discord.gg/MFTR2tFFhb
Market with low minting costs
Rarible Discord: https://discord.gg/mgyWVj2rSS
Exclusive markets (Application needed!)
Known Origin Discord: https://discord.gg/TUYeZW9ZqS
NiftyGateway (Requires a deposit of Ethereum in order to make any purchases)
Each of the exclusive markets above require a gas fee for every piece you mint. Nifty gateway is an exception that mints for you from a singular wallet and sends the piece over to the collector.
“Minting” is uploading your work to the blockchain. Each time you mint a work, with the exception of the “Free minting” on Opensea and Mintable, it requires a gas fee. Without getting too technical, there are certain websites that only host your image and do not really place it onto the blockchain. If the website goes down, so does your work, so please do your own research before making a decision on what platform to mint on!
An example of something that is completely on the blockchain due to multiple hosted servers is infiNFT
infiNFT Discord: https://discord.gg/qUMQEEeP9u
As well as: Pixelchain which is 100% on the blockchain, proven through the use of blockchain technology:
If you feel as though your works of art are extraordinary, file an application with one of the exclusive markets above! They will definitely take you in if they feel your work is just right for them.
Pricing your art can be quite hard. You want to say that your work is worth XYZ dollars, but collectors don’t necessarily see it that way. It’s unfortunate, but there is a way to cornering the market in your favor:
Be innovative — If your ideas are completely new and innovative, you’ll have no problems selling anything. Maybe you can price your works based on sales made with the more sales, the higher the floor rises. Or price them extremely low and the first few editions sold will receive a work of art worth XYZ currency! Or maybe you can use the old, gold method of having common, rare, epic and legendary tier items that scale with price based on their rarity!
Underprice until you don’t have to — If your works aren’t too extraordinary, chances are you might not get too many eyes on it if it’s too expensive. You might have to work your way up the pricing ladder with each better piece you make.
Price your works based on fiat (AKA your local currency, such as dollars) at first! — Fiat pricing is important to the regular consumer. They don’t want to spend $500 on a single pixel they know nothing about. If you’re looking for a collector, that’s completely different than your average Joe. You might find more of those on exclusive platforms as opposed to marketplaces like opensea or mintable.
Cute sells… most of the times — That’s it, that’s the whole thing. Having cute items will likely sell much faster than any other work.
If you are really looking for a good collector for your works, they like having early editions of contract mints. So keep that in mind before you mint willy nilly!
The people in the community are quite an amazing bunch. No one comes close to the family created here.
Don’t be afraid to reach out to other artists about advice, or about ideas on your own artwork, your own ideas and see if maybe they’d like to collaborate! Networking in general can be a great asset to an artist. Not only will you find other like-minded artists, but also potential collectors, and at the very least, you will be showcasing your work to a wider audience. The best places to find everyone is on: Twitter and Discord.
Don’t be afraid to use hashtags on Twitter to promote your work! The more eyes on it, the better! Art trains are more common as well, so don’t be afraid to share your work with others even outside the realm of crypto! And remember to share your work do not go into a thread seeking a sale. The more friends you make, the better.
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