It is no news that NFTs are becoming mainstream and the whole centre of attraction in the cryptocurrency world; those people who missed the bandwagon in the early days of Bitcoin now have another chance to make it big in cryptocurrency, and the advent of NFTs has made that possible.
Everyone is looking at the NFTs now that it has reached the mainstream audience. It is a great new technology that could potentially revolutionise how art is monetised and distributed.
Just before moving ahead, I would like to define what an NFT is if you are not familiar with the world of cryptocurrency.
NFTs are crypto-assets representing something unique and collectable using blockchain technology. I want you to think of an NFT like the regular cryptocurrency token that you know, such as Bitcoin, or Ethereum; the only difference is that NFTs are non-fungible, meaning that just as Bitcoin can be exchanged for Fiat cash or another cryptocurrency, NFTs cannot be exchanged for something else hence the term fungibility.
An NFT could be in demand because it has been created by a famous artist or composed by a world-class musician. The token could also be helpful in a game or wanted to complete a collection.
I wrote a comprehensive guide on how to get started with NFTs as a beginner; I recommend you click the link below to get started.
What Are The Crucial Things You Need To Know About NFTs?
The NFT market is hot right now, and as most people say, many people are making a lifetime fortune out of it. Still, being able to do so, you need to understand how the ecosystem is built and how you can navigate your way to the top, trust me, not every NFT art will make it big as others might have.
In this section, I will be spelling out a few tips that might be a handful for you to be able to navigate the world of NFTs.
1. NFTs are Just Crypto Art.
NFTs are just Crypto art and are tied to the crypto market. That means you will encounter many elements of the crypto world.
For example, the underlying technology that powers significant cryptocurrencies such as Bitcoin and Etherium is the same that powers NFTs.
You need to understand how cryptocurrency works before diving into NFTs. I wrote a comprehensive guide on this blog on how to begin with, cryptocurrencies as a newbie; click the link below to get started.
2. The value of your NFT is attached to a cryptocurrency.
Blockchain is a fundamental technology for creating NFTs. It uses cryptography to chain blocks into a growing list of records, making it impossible to modify.
Each block is locked by a cryptographic hash, or string of characters that uniquely identifies a set of data, to the previous block; this makes blockchain the most secure technology available on the internet.
Although blockchain was initially created to support fungible assets like Bitcoin and other cryptocurrencies, it has evolved to enable users to create a special kind of crypto asset, one that is nonfungible.
Ethereum blockchain has become a significant player in the growing trend in NFTs because it supports the ERC-721 token standard, enabling NFT creators to obtain information of relevance to their digital artefacts and store it as tokens on the blockchain.
When you pay for an NFT, it gives you the right to transfer the token to your digital wallet. The receipt proves that your digital file copy is the original, like owning an original painting.
And just as masterpiece paintings can be copied and distributed as inexpensive posters, anyone can have a digital copy of your NFT.
For example, cryptocurrencies such as Ethereum and Solana have been known to power NFTS. Therefore, your listing price may not change, but its value in USD will constantly change as the crypto market fluctuates.
3. NFT is still in its infancy.
Not many people are aware of this, but NFTs are still new compared to how we invest in cryptocurrencies by just purchasing a token and waiting for it to appreciate.
Even though the NFT space is still in its infancy, I believe that the vast expansion of the NFT finance market will be seen within the next five years to ten years when many brands become aware of how effective it can be monetised.
Some of your followers and supporters may follow you into the crypto space. Still, for the most part, you will be selling to artists and collectors that are already active in the community and have a decent amount of crypto accumulated.
4. NFT takes time and money to make money.
Apart from having an existing art idea and an exquisite talent, you still need to pay a considerable fee in cryptocurrency tokens to be able to make your NFT go live on the specified blockchain, and those fees are called gas fees.
Ethereum Gas Fees are pretty expensive, and you will find out very soon if you plan to mint NFTs on any Ethereum based platform like Opensea and others. Gas fees are network fees that have to be paid to put anything onto the Eth blockchain.
The downside about gas fees is that they tend to surge massively during high network usage; you could be charged hundreds to get an artwork minted.
When the network is less congested, you can still expect to pay $40+ for the same thing. On some platforms, you must pay a fee to mint the art, put it on auction, place a bid, accept an offer, withdraw a request, and delete (burn) the artwork.
It may cost higher for you to accept an offer than the offer is even worth in most cases. The good news is that there is a way to mint your art as an NFT for free, but this time you would be required to do so on a different blockchain called Polygon.
I wrote a comprehensive guide on how to get started with NFTs as a beginner; this article shows you how to mint art using free and paid methods.
5. Plagiarism Is The norm when It comes to NFTs.
The internet is a copy machine, and it is not inevitable; the truth is that the internet allows for the expression of creativity, making it easy to duplicate people’s work.
Making and selling NFTs based upon the artwork you don’t have the rights to is almost certainly an infringement, especially considering auction sites that sell NFTs use the original painting.
This is why NFT auction sites have rushed to create DMCA processes for removing unauthorised NFTs. However, there is no way it will be effective as many sites still actively encourage people to tokenise content they don’t own.
For example, The Pokémon Company has not released or hinted at releasing any NFTs yet. Still, if you search Pokémon on Rarible, you will find dozens of their trademarked characters being sold for thousands by random artists making money off other people’s work.
You have to make sure that any work that any NFT you desire to collect is a unique work of such an artist, a story behind such art and a huge community willing to put their weight behind such a creator.
6. Ethereum is not the only NFT blockchain.
As stated earlier, NFTs are powered by blockchain technology, making it an open field for every major player to have a say.
Though Ethereum might be one of the major players in the current NFT world, it is clear that so many other blockchain startups will throw their weights into NFTs to be able to stay relevant.
A majority of these blockchain players already include Solana, Polygon, Binance open chain, and many others.
Gas fees make using the Ethereum blockchain unattractive as many alternatives provide cheaper options.
However, you don’t have to suffer this financial headache to be involved with NFTs as an Artist or collector.
A few excellent alternatives to Ethereum are worth exploring, one of which is Polygon, Solana, and many others still coming up.
7. Don’t go broke doing this.
One thing about young people is the excitement that comes over them when they discover a new trend; we have seen so many people lose and gain money during Ponzi schemes and lotteries; I am not saying NFTs can be grouped into those mentioned, but you need to be well equipped with the correct information so that you end up at the losing end.
Just imagine investing all you have in minting an art that you think will become mainstream and end up losing all in the end; I don’t believe that is a good idea.
If you don’t have too much to spare when minting your NFT, you should use a cheaper blockchain called Polygon; it comes with no gas fee.
Again, gas fees suck, and they are expensive when deploying on Ethereum. Don’t feel pressured to sell on Ethereum because of the glamorous sales announcements you see across social media. It all comes at a cost, and not everyone can bear it.
The other blockchain marketplaces are getting a ton of attention, and I believe that non-Ethereum platforms are where the bulk of the community will find their peace.