123 Things I Wish I Knew Before Getting into NFTs
Are you seriously going to read all of this?
I am hoping you are not expecting to go through 123 things on this medium story. Title itself is click-bait and if you are reading this, it means you already fell for it, so that is all what matters.
Jokes aside, it is going to be a long post where I will be writing everything I know about NFTs so far and about the things I wish I knew before getting screwed and loosing money in so many projects.
What are NFTs (non-fungible tokens)?
NFTs are cryptographic assets on blockchain (general ledger) which is digitally stored and can be identified by their identification codes as well as metadata which helps distinguishing themselves from each other. This brings to attention the difference with fungible tokens (cryptocurrencies) which are identical to each other, meaning that can be used to transact, exchange as a medium for commercial transactions. Yeah I know, highly technical definition but it is what it is. An NFT can be anything digital (your drawings, photos, videos, 3D designs etc..)
How do I buy my first NFT?
First things first. Before you do anything related to NFTs, do me a favor, open a Twitter account, Discord account and Telegram account.
Nope. Don’t pretend to continue and ignore what I asked in the previous paragraph, go and do what I asked first before you move on. You will thank me later.
I know, you might be already sick of all those social media platforms but if you really want to get involved in the upcoming NFT projects and learn more about them, those three channels are widely used by NFT creators. There are all different types of marketplaces where you can buy NFTs, but the most popular one without a doubt is OpenSea.
There is a huge amount of projects actively trading in this marketplace that are actively trading in art, music, domain names, trading cards, collectibles, sports etc..
Now, if you want to go ahead and buy you NFT project, all you need is a wallet account and connect it with OpenSea. There are a lot of wallet types for NFTs but the most widely used one is MetaMask as it is used from most of the projects in the process of minting. There are other wallets such as Coinbase wallet, Trust wallet, Hotbit etc..
The process of opening a MetaMask account (or any other one), is pretty simple and straight-forward. If you need help with the setup, please read their official FAQs or checkout this quick tutorial on YouTube.
Hold on.. you mentioned Twitter and Discord but I still don’t see the benefit from them.
Thank you for remind me that. You can buy any NFT you like from OpenSea, but keep in mind that OpenSea is a secondary market for the projects that have already launched. You might still be able to benefit from them, but most of the benefits will come if you will be able to be part of the project on their early days.
Most of the projects in the NFT space need to create some sort of audience before they launch their project. This will help the project get some traction and the more people involved, the higher the chances that launch will be successful.
Most of the projects might be a small group of people which are working in the project. The best way to attract more people to be part of the project is by offering incentives to the ones who join early. Those people who join early and support the project are called whitelist people and they get all different types of perks. It can either be a free NFT after public launch or lower pre-sale mint. All of this because you were an early supporter of the project and you helped the team reach a wider audience.
Twitter is the space where most of the people launching NFTs make the announcement. An announcement can describe the project they are working as well as offer either monetary offer or a whitelist if you follow and retweet their announcement.
By retweeting this you might get lucky and be part of the whitelisters. Please note that being a whitelist will give you no guarantee that the project be successful, it will just offer you a benefit by either getting a free NFT, a lower prices or higher quantity of mints you will be able to mint when project launches. This is done mainly for the purpose of creating a community where there is actively being discussed about the project.
Discord and Telegram are the most widely used tools to create a community and keep the discussion going about those projects. If you see any project you like, make sure you join their discord and be active as much as you can, there are a lot of rewards for people who are active and help new comers. The good thing about NFT space is that there are no borders and I have seen so many people who can not afford the high prices of buying NFTs but they were able to get a lot of them for free by being active in discord and helping new comers for a specific project (this is another way to get whitelisted for a project).
How do I sell my first NFT?
In order to sell your first NFT, first you have to be a creator of any type of art and post it in a marketplaces for NFTs. There are a couple of them such as OpenSea, Rarible, SuperRare, Foundation, Mintable, etc., but the most widely used one is OpenSea.
If you have not created any but you bought from a secondary marketplace, you can sell it from the same marketplace you bought it. There are different options that you can sell an NFT, either by an auction or at a fixed price. For projects which are successful, you might even get offers without you listing them for sale, for which you have the option to accept it or reject it. One thing that you should keep in mind when trading with NFTs is that, for every interaction that involves storing data in general ledger (blockchain) you will have to pay a gas fee if the platform is trading on Ethereum Blockchain. If you want to learn more about gas and fees, read more on the official documentation.
On top of gas fees, you will have to pay a small % to the platform you are trading on (OpenSea has 2.5% of the price) and a percentage as royalty to the creator (% varies depending on how much the creators ask for).
There are a lot of tools where you can check for gas fees and how much do they cost. Some of the ones I use the most are as follows:
Ethereumprice- they offer charts with gas prices hourly which gives you a good idea on when is the best time to transact.
GasNow- this one will give you gas price estimation depending on what speed you have selected for your transaction.
Ultrasound- my favorite tool so far. It shows the current gas price as well as the upcoming blocks which are being posted in the general ledger which serves as an estimation for the transaction you will do. If I see the upcoming blocks to have a lower gas, then that is when I interact.
Where can I find NFT projects?
The best tool for that would probably be Twitter. Make sure you search for specific keywords, follow people who are successful with NFTs, turn on notifications when they post and actively research on YouTube for any upcoming project.
Besides Twitter, there are other websites which were created with the whole purpose of promoting upcoming projects. I would highly suggest to DYOR (Do Your Own Research) before getting involved in any project. There might be a lot of useless projects and keep in mind that NFT market is highly volatile and risky where 99% of the project will end up being trash in long run.
IcyTools- Is a website which I use a lot to see what it is trending in the NFT space. It shows the projects which are actively trading, their floor price (the lowest price you can purchase an NFT from their project), their traded volume as well as compare it with other projects.
Please note all projects involved in the screenshots below are projects which I have no clue what they are about and I do not recommend you to join, it is just so that it happens they were here when I took a screenshot to show you how the website looks.
NFTscoring- it is another website which provides more details about upcoming and existing projects. YOu will be able to see how much twitter followers they got, their discord members, mint price and a lot of other details which might help you with your research.
RarityTools- This one as well offers you details about upcoming projects by showing you details about the project and you will get a sneak peek of their art.
WhatIsMinting- This website shows you live projects which are being minted currently.
NextDrop- Provides you with more details about the project and their official website.
How do I know which project is worth to get involved ?
There are a lot of things which you should know about a specific project before you get involved. While your research should not be limited to those, I will be listing some of the research I do before I decide to give up my time and my money in a specific project.
- After I have noticed a project and I am curious to learn more about that project, the first thing I do is check their Twitter account. Please keep in mind that NFT market is relatively new and if you see accounts on Twitter opened recently, that does not mean that the project will not be successful. What interests me the most is Twitter followers and the engagement ratio on their posts. (Please note, lot of those projects will buy followers and comments). If you see a specific pattern of language in comments, then those comments might be purchased and do not represent real people, which project I would definitely avoid if I see something similar.
- If I am happy with what I see on Twitter, I check their Official website. First, I check their description about the project, whether it makes sense or not. If I see a low quality design with typos in writing that might be a red sign. If everything is correct with design and the writing, I want to check and see if they have a whitepaper and a roadmap about this project. If there is no clear whitepaper which explains the details of the project and how this will progress in the future, I would definitely avoid that.
- Another really important point to check for is the about us section in the official website of the project. Before getting involved you want to know who are the team members and what are some other projects they have been involved previously to creating this project. Please note, there are a lot of projects which might be successful with team staying anonymous, I tend to avoid such projects as we have seen so many cases when people have been rug pulled (another term for creators who run away with your money). If team is doxed (publicly identified), then at least you know about them and the projects they have been involved previously which is a safer bet than getting involved in projects where team is anonymous.
- I also check their Discord group. I want to see the activity happening there, incentives which are being offered for early investors and the overall discussion happening in those groups. The more active the discord group is the better, that will create hype and FOMO (fear of missing out) which usually will keep floor prices higher.
- After checking all of the above, I want to make sure that I feel right about the project when I get involved, but keep in mind that even if everything feels right, it does not guarantee that this project will be successful. I tend to get involved mostly in projects which have a lower mint price, which might be different depending from the risk you are willing to take.
A golden rule about NFT space. Invest only what you are willing to loose. This market is extremely risky and highly volatile.
What is trending in the NFT space right now?
While I will avoid listing names of the projects I am currently involved or have expressed interest to join (might be able to share if there is interest on that), I can speak overall on what is trending and which types of NFTs to look for.
There are different types of NFTs currently in marketplace. Most of them are PFP (which stands for Profile Picture) projects and there is no actual utility behind. As an example of PFP is CryptoPunks which are the most successful project in the NFT space with 744k ETH word of trades ($3.1 billion). This project, among with CryptoKitties are the first projects created in the NFT space back in 2017.
There are other types of NFTs which besides the PFP, they offer also some utility that comes with the NFT. Utility can be different. A specific example would be a game created behind those NFTs where you will be able to use the character you minted in the game and generate some time of coin (crypto currency) by playing the game. This type of project is the most popular one as of know which I would highly consider that you pay a special attention to it.
I have added some dots in here, making you think that I will continue writing about this topic with the hope that you will follow me (click-bait). Seriously, if you want to learn more about the upcoming projects as well as the current projects I am involved as of now, spam me with comments below and depending from the interest, I might write another follow-up story where I get into the details.
If any of you has benefited from this story, come back to me and let me know so I can include you as a testimonial so people can see how good I am at writing about NFTs, then try to sell them an NFT course (just joking), well not a joke actually, but that might come later as I figure out how to get you to pay for it.
Cheers!
