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

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

Due to the gigantic progress of non-fungible tokens (NFTs) in 2021 there is more interest in the market than ever. 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 it is so complicated to get into. The problem here lies not in literally entering the world, but in the enormous barrier of knowledge. Words like Mint, (Non-)fungibility, blockchain and all other terms make it complicated to create a clear picture of what exactly it is. But don’t be sad! I want to change that today!

Starting with the basics of an NFT

To really understand what you’re getting into, it’s 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 exactly it is. 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 gives away, it is non-fungible. This is a term that comes up very often, but 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 bought in large quantities. You can have more than 1 Ether yourself! This is not possible with NFTs. There is only 1 variant of the artwork that you own. So you cannot go to an exchange and buy more of 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 trading 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 such a work of art yourself? Before we get 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 sector with opportunities left and right. The downside to this is that there are many ambitious people who think they will “sell out a collection”. These collections often end up as only half-sold out collections, with the result that the NFTs are worthless after a while. To prevent this, it is important to do a lot of research into the project you want to invest in.

Now the question probably 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 out. Investigate 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 real or are they fake bot accounts?

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

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

You’ve done your research and you think you’ve found a project that’s going to blow up. What now? The next step is to find the place where you want to buy NFT. Due to the huge growth of web3, there are hundreds of platforms where you can do this, but there are several options on how you can approach this. There is simply a distinction between 2 options.

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

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

The other option is to buy an NFT on a so-called secondary market place. This is a sort of marketplace where people list 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 therefore this is very accessible to the new user.

Make sure you have enough crypto

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

After that, make sure you have enough Ethereum in your wallet. It is very important that you have the price of 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 don’t have enough money to pay the gas charges, you can’t 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 connect your wallet to the website where you need to buy NFT

Usually there is a big “Connect wallet” button at the top right of the page, click 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 go through!

3. See your NFT in your wallet

Check if the transaction went through and see the 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’re a proud owner, it’s 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 bought? It is also very important to keep an eye on the floor price, the lowest price at which you can buy an NFT of your collection. After all, it is useful to know approximately how much your NFT is worth. It is important to remember that you cannot always win. Sometimes you invest in a project that doesn’t pay off 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 truly 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 crazy uncle about NFTs again for the family birthday. Pretty cool right? My work is done for now.

Good luck in the NFT world right now!

Leave a Comment