NFT Guide

In recent years, Non-Fungible Tokens (NFTs) have surged in popularity as an investment avenue and can yield profits with the right approach. This guide aims to provide a fundamental grasp of crucial aspects within the NFT realm.

It's important to note that NFT investments can carry significant risks. While this guide serves as a valuable starting point for exploring various facets of NFTs, conducting thorough research on your own is always advisable.

What is an NFT?

An NFT, short for "Non-Fungible Token," is a data unit residing on a blockchain that serves as irrefutable evidence of the absolute uniqueness of a digital item. While NFTs are commonly associated with Ethereum's blockchain technology, they can also exist on other blockchains like Solana, Polygon, and more. Ethereum, in particular, operates as a decentralized public ledger used for verifying and recording transactions and is accompanied by its own cryptocurrency, often referred to as ETH or Ξ.

NFTs come in various forms, such as profile pictures, music, videos, digital trading cards, art, and video game items, among others.

Why are NFTs valuable?

NFTs possess intrinsic value because they are underpinned by blockchain technology, and each possesses a unique token ID. Furthermore, their worth is contingent on demand; if there's significant demand for a particular item at a certain price, it signifies its inherent value.

A common critique of NFTs revolves around the misconception that taking a screenshot grants ownership. This notion is inaccurate because ownership pertains to the NFT token itself, not the associated digital asset.

The variations in NFT values can be attributed to numerous factors. Some gain value owing to their exceptional utility and future potential, while others derive worth from their artistic uniqueness. Factors such as hype, trends, community support, and management also play significant roles in determining an NFT's value.

Risks of NFTs

1. Lack of Regulation: NFTs are a relatively new and rapidly evolving market, and they are not heavily regulated in many places. This lack of regulation can make it more challenging to resolve disputes or protect your rights as a buyer or seller.

2. Market Volatility: The value of NFTs can be highly volatile. Just like cryptocurrencies, NFT prices can fluctuate dramatically in a short period. This means that the NFT you buy today for a high price might be worth much less in the future.

3. Scams and Frauds: The NFT space has seen its share of scams and fraudulent activities. There have been cases of fake NFTs, phishing scams, and misleading information about the ownership and rarity of digital assets. It's essential to be cautious and do thorough research before making any purchases.

4. Ownership and Copyright Issues: Owning an NFT doesn't necessarily grant you copyright or intellectual property rights to the underlying digital content. The original creator or copyright holder may still have rights over the content, which can lead to legal complications.

Example of NFTs

Non-Fungible Tokens (NFTs) have a wide range of utilities beyond just digital art and collectibles.

Digital Art and Collectibles: This is one of the most well-known uses of NFTs. Artists and creators can tokenize their digital artwork or collectibles, allowing buyers to own a unique, verifiable, and tradable piece of digital content.

Example: https://app.veve.me/ - NFT Collectibles from brands such as Disney, Marvel, DC plus 100-250+ other major brands

Gaming: NFTs are increasingly being used in video games to represent in- game assets like characters, weapons, skins, and virtual real estate. Players can buy, sell, and trade these NFTs, giving them ownership and control over their digital assets. Play2Earn NFT games can be profitable but very volatile.

Example: https://www.tensor.trade/trade/theheist - Ponzi/Play2Earn Game that offers crypto for participating in their game

Passive Income and Loyalty Programs: Web2 companies, like casinos, coffee shops, clothing brands, and e-commerce ventures, can use NFTs for loyalty and profit-sharing. NFT holders get benefits like profit shares, discounts, early access, and more, encouraging loyalty and offering passive income, boosting customer engagement and brand loyalty.

Example: https://rollbit.com/ (#2 Crypto Casino) NFTs give holders gambling benefits + passive income from their profits generated These are just a few examples, and the utility of NFTs continues to expand as new use cases and applications are developed within the blockchain and cryptocurrency ecosystem. NFTs have the potential to revolutionize ownership and provenance in the digital world across various industries.

Ethereum and Solana

The Ethereum network represents a decentralized, open-source blockchain founded by Vitalik Buterin. Notably, Buterin conceived the idea at a mere 19 years old and saw Ethereum's release when he was just 21 in 2015. As of the current moment, Ethereum ranks as the second-largest cryptocurrency by market capitalization, boasting an impressive figure of $219,375,953,376. Its native cryptocurrency is ETH (Ξ).

On the other hand, the Solana network is also a decentralized, open- source blockchain, established by Anatoly Yakovenko. Solana made its debut in the year 2020 and currently holds the ninth position in terms of market capitalization, which stands at $14,243,591,087. The native cryptocurrency for Solana is SOL (◎).

MetaMask

MetaMask is like a special digital wallet for the internet. Just like you have a wallet to keep your money and important cards like your library card or ID, MetaMask is a virtual wallet that you use on your computer or phone to keep digital things.

But what's special about MetaMask is that it's made for the digital world. It helps you manage a type of digital money called cryptocurrency, like a digital version of coins and bills that you can use to buy things or trade with others on the internet. It also lets you interact with special websites and games that use this digital money.

So, in simple words, MetaMask is like a digital wallet that helps you use and keep track of digital money and other digital stuff on the internet. It's a handy tool for people who want to do things like buy, sell, or play games online using cryptocurrencies like Bitcoin or Ethereum.

A lot of NFTs we post, we advise to use MetaMask for as its reliable and secured.

How to purchase an NFT

Website Minting: In many projects, their websites feature a "mint" button that, when pressed, triggers a MetaMask or Phantom wallet transaction (for ETH and SOL wallets, respectively). Through this transaction, you can proceed to complete the checkout process.

Contract Minting: If a project lacks a website or its website is inaccessible, it might be advantageous to mint NFTs directly from the contract (although this isn't always feasible). To do so effectively, visit their contract link, access the "Write Contract" function, and locate the minting function, typically labeled something like "PresaleMint" or "PublicSaleMint." Open this function.

Typically, you'll encounter two fields: "payableAmount" (in ether) where you input the mint price (multiply if minting multiple NFTs, e.g., minting two NFTs at 0.1 each would require entering 0.2 in this field). The other field is "_signedQty," where you specify the quantity you intend to mint. Finally, click "Write" to initiate the transaction. If gas fees are exorbitant, the minting might not be live or could be sold out.

Just below the "Write Contract" option, you'll find a button labeled "Connect to Web3," which you must use to connect your wallet before proceeding with the minting process.

Buying from Secondary Marketplaces: Alternatively, purchasing NFTs from secondary marketplaces like OpenSea for ETH or MagicEden for SOL is an option, provided you have confidence in the future potential of your investment. As always, it's crucial to invest only what you can afford to lose. The process is straightforward: select the desired NFT, connect your wallet (if not already connected), click "Buy," and complete the transaction.

How to sell an NFT

Ethereum: When selling Ethereum-based NFTs, the primary marketplaces include OpenSea, LooksRare, and X2Y2, with OpenSea being the most widely used. The process for listing an NFT is quite similar across all platforms. You visit your inventory or collection, select an NFT, click the "list" option, set the price, and confirm. Keep in mind that there might be a small gas fee required to approve the transaction.

Solana: For Solana-based NFTs, the prominent marketplace is currently MagicEden, and the listing process closely resembles that of Ethereum NFTs.

Transaction Fees: On most platforms, there are transaction fees associated with selling NFTs. For instance, OpenSea typically charges a 2.5% fee, and the collection may also impose an additional fee of up to 10% on each transaction.

Bulk Purchasing: To purchase or list NFTs in bulk on the Ethereum network, you can utilize websites like Gem or Genie.

Gas Fees: Gas fees on the Ethereum network can vary depending on the network's congestion at the time of the transaction. Solana, on the other hand, generally incurs very minimal transaction fees. Gas Fee Predictor Example: https://www.blocknative.com/gas-estimator?gasType=ethereum

Gas Tracker Example: https://etherscan.io/gastracker

Gas is measured in GWEI, which is equivalent to 0.000000001 ETH. The total gas cost you pay is calculated by multiplying the gas price (in GWEI) by the contract's gas limit.

NFT keywods

Blockchain - A shared system which facilitates the process of recording transactions and tracking assets.

Decentralized - Transfer of control from a centralized entity, to a distributed network.

Gas - A fee required to successfully complete a transaction on the Ethereum blockchain.

Market Cap - The market cap of crypto is the total value of a cryptocurrency, whereas the stock market cap is share price x how many shares outstanding.

Airdrop - free collectibles/NFTs (usually a reward e.g. an NFT holder) that gets sent to someone’s wallet.

Degen - Short for “Degenerate”, refers to people who make risky and bad bets e.g. investing without doing research before.

Diamond Hands - Refers to someone who holds an NFT regardless of what happens in the project, usually someone with high-risk tolerance.

Paper Hands - Refers to someone who is nervous or panic sells their NFT too soon.

DYOR - Stands for “Do Your Own Research”, means to research before investing into any project or NFT.

Floor Price - Measured as the lowest price listed of an NFT in a collection.

Mint Price - The price it costs to buy an NFT when there is a sale (either Whitelist or Public sale)