Everyone is talking about them, but does anyone really know what they are?
Though we went over some of the finer points of the NFT scams that were and are going on, I thought it was necessary to take a step back and figure out what NFTs even are.
Non-fungible Tokens
Thank you, and goodnight! No. A non-fungible token simply means whatever digital media is created cannot be reproduced. Basically, it would be like if someone made the Mona Lisa, and it truly could not be duplicated.
The original creator may still own the copyright for your token and the right to recreate it, so make sure you take note of any such legalities. The last thing you want is to tell all of Twitter you have the only [insert really cool thing here] and find out a week later that a thousand other people do too. Sigh.
Yes, it seems contradictory, but the fine line here is that you would own the ORIGINAL. I know, cool flex, but where’s the benefit? If it is something that is truly 1 of 1, then the potential resale value could be the same as a piece of physical fine art. If it is something of a limited set (say, an album only available for a month), you may find yourself in a position to have exclusive listening parties. All in all, understand the limits to your purchase BEFORE you spend your hard-earned crypto.
Where Do I Find NFTs?
The majority of NFTs are on the Ethereum blockchain (ETH). However, other blockchains also allow for the creation of NFTs, like Cardano (ADA) and Solana (SOL).
More to the point, you can usually go directly through the seller’s website to purchase whatever NFT they may sell. You’ll need to buy it with whatever crypto represents the blockchain it originates from. In simpler terms, if the NFT you want is on Ethereum’s blockchain, you have to use ETH to buy it. If it’s on Cardano’s blockchain, you have to use ADA to buy it.
How Do I Buy NFTs?
Okay, this can get a bit more confusing depending on who you’re dealing with. As if this wasn’t already a nightmare of techno-magic.
Your available options are:
1. Purchase directly from the creator or seller
This is the ideal situation. Ask any relevant questions (like purchaser rights, owner rights, etc.) BEFORE your purchase, this should be a straightforward exchange.
2. Use an NFT marketplace
The Ascent has an AWESOME list of the top NFT marketplaces. Plus, a quick breakdown of what to look for in a marketplace. One of the most important notes:
Some support a wide variety of tokens. Others are closed marketplaces and utilize a specific proprietary token. When opening an NFT marketplace account, be sure to fund your blockchain wallet with the right crypto or token required to participate in the site’s activity.
Basically, if you stay ready, you won’t have to get ready. Make sure you have the suitable funds for the job, and you’ll be able to purchase whatever you please.
3. Use an auction site
Yes, you can absolutely purchase NFTs from sites like eBay. You should note that scammers are out there, like anything else on eBay or other auction sites. Purchase from verified accounts and do your due diligence, as suggested in our NFT scammer article. If you ever wanted to cyber stalk someone, this is definitely the time.
Uh, What Do I Do With NFTs?
So I’m sure after seeing people spend literal millions on these things, the question becomes, “What’s the point?” Well, that’s really up to you.
Hold on to it like a piece of art
As I mentioned before, the resale potential of NFTs can be pretty significant. If you really believe you’re holding on to this generation’s Monet, by all means, hold on to it for dear life and watch its value grow. If your call is correct, you could be looking at not just life-changing money but generational change. As a hip-hop artist, I’d say you’d be in pretty good company with the likes of Nas and Snoop betting on NFTs for their music.
Flip it like a remodeled house
If you’re feeling less sure of the long-term value of your NFT, you can turn around and sell it. Supply and demand are always the controlling factors when determining how well this approach will work, but there’s potential for profit if you gauge it right. In many cases, the resale of NFTs will make you more money than the person who created them.
Flex on everybody!
Hey, sometimes it’s just about bragging rights. Having a unique in-game item, one-of-a-kind display pic, or song no one else can listen to might just be the endgame for you, and that’s cool too. Depending on the terms for the NFT, you will most likely be able to do whatever you like with it for personal use, so go nuts. Not every NFT costs the GDP of a small country, so if it’s within your budget, YOLO.
Anything Else?
The best information I can try to instill in you before you go is, as with anything else in life, to do your research before purchasing. Check out some of the basics of crypto and blockchain, look into any creator you plan to buy from, and make sure this is a move you can afford to make. Like any physical item purchased as an investment (art, property, etc.), NFTs can bite you in the butt if you don’t know what you’re doing. They can also completely change the game for you and your family. Be smart, never get into something you don’t understand, and if it seems too good to be true, it usually is.
Related Reads:
How to Avoid Getting Scammed Buying NFTs
Why You’re More Susceptible to a Con than You Think
Buying Crypto for the First Time
Crypto and the Great Currency Exchange Fiasco
Writer, rhymer, gamer: the easiest way to define the man known as Kenneth Medford. I’m a simple man who loves to learn and loves to help and I wander the digital world trying to find ways to sate my hunger for both. Basically, I’m Galactus but helpful.
Check out my other work here or reach out to me on LinkedIn.
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