What is it and how do I get one for myself? Chatterhead explains

In this series of blog articles, Jordi van den Bussche dives into the wonderful world of web3, non-fungible tokens (NFTs) and blockchain. He already wrote about the meta-verse and last week web3. This week he explains what NFTs are!

Due to the gigantic progress of non-fungible tokens (NFTs) in 2021 there will be more market interest than ever before. Although it is a controversial topic and opinions vary widely on whether it really has a future, there is a constant stream of new people interested in NFTs. One of the biggest problems in the NFT world right now is that getting in is so complicated. The problem here lies not in literally getting into the world, but in the enormous barrier of knowledge. Words like Minten, (Non-) fungibility, blockchain and all other terms make it complicated to create a clear picture of what exactly it is. But do not be sad! I want to change that today!

Starting with the basics of an NFT

To really understand what you need to get started on, it is super important to understand the basics. What exactly is an NFT?

NFT stands for Non Fungible Token. The name already tells a lot about what it is exactly. An NFT is actually just a cryptocurrency, like Ethereum (ETH), Solana (SOL) or Bitcoin (BTC). The NFT is recorded on the blockchain network and is therefore recognized by all users of the network where you have recognized the NFT. The only difference from conventional tokens is that as the name suggests, it is non-fungible. This is a term that comes up very often but which is really very important to understand. What exactly does that mean?

Non-Fungible actually means that only 1 of them is possible. Bitcoin, Ether and your other favorite coins can be purchased in large numbers. You can even have more than 1 Ether! This is not possible with NFTs. There is only 1 variant of the artwork that you own. So you can not go to a stock exchange and buy more of just your NFT. It is also what creates the value of NFT. The fact that there is only 1 available of your specific image creates a scarcity. NFTs are therefore often seen as a kind of collector’s item.

Although in practice this now often leads to trade in digital art (of which my Bored Ape is a good example), the future possibilities are of course endless.

Okay, we’ve now briefly reviewed what an NFT is, but how do you get yourself such a work of art? Before we go into the technical details, we must first mention one of the most important principles in the NFT world.

One of the most important principles in the NFT world is DYOR. DYOR stands for Do your own research† The NFT world is a growing industry with opportunities left and right to take. The downside of this is that there are many ambitious people who think they will “sell a collection out”. These collections often end up only as half-sold collections, with the result that the NFTs are worth nothing after a while. To prevent this, it is important to do a lot of research in the project you want to invest in.

Now the question arises: But how do I do it? And what should I look for? The simple answer is: Everything. With NFT collections, every little detail can be a selling point. Make sure you really know the project inside and out. Examine the owners: Who are the people behind the project?

Are these people with experience? Can I trust these people?

But also look at the project itself: What future plans are there? How will they market the project? Is the current community genuine, or is it fake bot accounts?

Investigating NFT projects takes a lot of time and can be very tedious at times. However, it is a requirement for success in the NFT world that is one reason why DYOR is one of the most used mottos in the NFT world.

I’ve found a project I trust, what now?

You have done research and you think you have found a project that will blow up. What now? The next step is to find the place where you want to buy NFT. Due to the tremendous growth of web3, there are hundreds of platforms where you can do this, but there are several options for how you can approach this. Simply distinguish between 2 options.

The first option is to purchase an NFT from the artist who created the NFT.

This makes you the first owner of NFT, and you bring it out into the world, so to speak. This will be mint named. This is usually done on the collection’s website for large projects. A date and time are often communicated to the community, and it’s up to you to get an NFT.

The second option is to buy an NFT on a so-called secondary marketplace. This is a kind of marketplace where people display their NFTs. So you become a kind of second-hand owner. Buying through these secondary marketplaces is often the easiest. Due to the huge growth, these platforms have focused on customer friendliness and simplicity, and this is therefore very accessible to the new user.

Make sure you have enough crypto

Most NFTs are sold with crypto. You must therefore have a crypto to buy NFT. Usually this is Ethereum. But how do you really get it? First, you need a crypto wallet. Make sure that this wallet can also be connected to the platform / website where you are going to buy NFT. The most common Ethereum wallet is Metamask. A guide on how to set this up can be found here.

Next, make sure you have enough Ethereum in your wallet. It is very important that you have the price of the NFT + gas price in Ethereum. The Ethereum network charges a certain price in ETH per transaction, a kind of transaction cost. These transaction costs vary and depend on how busy the network is at the moment. So remember this, because if you do not have enough money to pay the gas taxes, you can not buy NFT.

The purchase

Finally, you still need to buy the NFT you have chosen. This is probably the easiest step in the process. This is usually done in 3 steps.

1. You link your wallet to the website where you are going to buy NFT

Usually there is a large “Connect wallet” button at the top right of the page, click on this and accept the connection in your Metamask (or other wallet)

2. Purchase of NFT

Check if you have enough money in your wallet, then click “Mint” or “Buy”. Accept the transaction and wait for it to come through!

3. See your NFT in your wallet

Check if the transaction went through and see NFT in your wallet. Congratulations, you are now the proud owner of your (first) NFT!

And now?

Congratulations! Your first NFT has arrived. Now that you are a proud owner, it is important to keep a close eye on the market. Are there other projects you would like to participate in? Can you possibly claim another NFT with the NFT you purchased? It is also very important to keep an eye on the bottom price, the lowest price you can buy an NFT of your collection for. After all, it is helpful to know approximately how much your NFT is worth. It is important to remember that you can not always win. Sometimes you invest in a project that yields nothing or where you might even lose money. That’s part of it! Experiencing the NFT world comes with trial and error, but we are all pioneers now and face a bright future.

Whether you are successful with your first NFT or not, one thing is for sure. You can now really call yourself an NFT expert. You now know all the basics, you understand how to get started, and you can join the conversation when you start talking to the crazy uncle about NFTs again for the family birthday. Pretty cool isn’t it? My work is done for now.

Good luck in the NFT world right now!

Leave a Comment