Don't Worry, I Didn't Get NFTs At First Either
They are easier to understand than you might think
NFTs are everywhere.
Well—discussion of them is everywhere. They are one of the most popular things to talk about when it comes to the world of cryptocurrencies and blockchain technology. People tend to view them with a mix of curiosity and confusion. For a long time, I did too.
Until I got one of my own.
My NFT is called Field, and it resides on Algorand. A fellow Algorand enthusiast happens to be a talented artist, and he gave me an NFT of Field a few months ago. I really like it—and now that NFT is registered to me to the blockchain, which means I have a clear record of the transaction. Field sits in my Algorand wallet right alongside my $ALGOs and other investments.
And well, it’s… fun. I’m having fun with my NFT. You can too.
But before you get one, here are some things you might not know about NFTs:
NFT stands for “non-fungible token”. Like many things in internet culture, shortening non-fungible token to NFT just sounded cooler, and was easier to type. So here we are. NFT it is.
The first “known” NFT showed up in 2014. That NFT was a video, and the transaction happened during the Seven on Seven conference in NYC. It cost $4.
NFTs are very popular in the art world. Most NFTs are digital art, but music, videos, and digital products have also been made into NFTs.
Ethereum is the most popular blockchain for buying and selling NFTs. But that doesn’t mean that other chains don’t support them. Algorand, Cardano, Tezos, Solana and others also have growing NFT communities.
Owning an NFT does not mean you own a copyright or the intellectual property. Instead, it means the owner has the digital keys to the token itself. The key are the property, not the media itself.
NFTs are more speculative than cryptocurrency itself. Buying, selling, and trading NFTs is basically unregulated, which means that the marketplace can be subject to scams, fraud, insider trading, and more. Anyone purchasing an NFT should be aware of this before putting down money.
Most NFTs sell for $200 or less. There have been popular NFT sales, such as the millions raked in by the artist Beeple in spring 2021, but most NFT sales are for a few hundred bucks. And that’s before paying fees, which can be quite high on places like Ethereum. Read more about prices here.
NFTs are a great way to create a community. People like to be part of a group, and certain NFTs have fostered that. One of the most famous examples is Bored Ape Yacht Club. The community aspect is one of the reasons you’re going to see more brands, companies, and celebrities get into NFTs in 2022.
NFTs fit right into the the metaverse. And we all know there is some serious cash pumping into various metaverses under development. Expect NFTs to play a big role as those mature.
NFTs show no sign of slowing down. OpenSea, the largest NFT marketplace, is on track to have record sales this month, topping a previous high set in August 2021.
So… should you get an NFT for your collection? Or a few? That’s entirely up to you. As always, please think it through before making any investment. NFTs are very popular right now, but you want to go in with your eyes wide open and your head in the right spot.
And most of all—have fun. What is life without that?
The Crypto Connection is for entertainment purposes only and is not meant to be financial advice. Please do your own research before investing in any asset class. Sara Celi is not a financial advisor, and holds several cryptocurrencies. To purchase her books on Amazon, please click here.