NFT's….Unless you've been living under a rock I'm sure you have seen or heard the hype
train surrounding and non-fungible tokens.
But even as someone who had heard a lot about NFTs, I was still confused about if this is
just low-resolution art that is selling for ridiculous amounts of money or if this truly
has a practical purpose in the digital world.
So lucky for you I spent several days learning everything I could about NFTs and today we're
going to talk about how you can actually buy and sell NFTs and maybe even make some money
while you're at it.
All right let's jump right into it.
What is going on everyone I hope you are all having a fantastic day.
Okay so and NFT or non-fungible token is probably a phrase you've heard a lot about but what
the heck is it.
Well, the term fungible is essentially a reference to the ability of a good or asset to be interchangeable
with another good or asset.
So for example cash or another kind of currency is extremely fungible because I can give you
$20, you give me $20 and that is really easily interchangeable.
Bitcoin and other cryptocurrencies are also very fungible because again they can be easily
replaced and many things in our daily lives like commodities would also be considered
fungible because they aren't scarce or unique in nature.
So with that in mind, the term non-fungible means that this good or asset cannot be substituted
easily for another asset and that would be things like artwork, memorabilia, or in the
case of today's conversation, an NFT.
Now I don't know about you but for me when I hear the term NFT or at least when I heard
it a few days ago, I literally just thought of low-resolution crypto punks and other artwork
online that is selling for hundreds of thousands and in some cases, millions of dollars and
I think most of us would agree that that's a little bit ridiculous.
But the term token which is the T in NFT is where things start to get a little interesting
in where this all starts to actually make some sense.
So the token simply refers to the digital certificate that is stored on the blockchain
just like your favorite cryptocurrency is so if an artist takes a piece of artwork or
maybe even a song and mints that on the blockchain then it is now referred to as a token.
And that's how people have listed things like crypto punk 3100 which sold for $7.6 million,
crypto punk 7523 which sold for nearly $12 million, and of course Beeples infamous 5000
days of digital artwork which sold for nearly $70 million.
So we'll talk about exactly how to list your own NFTs or even buy and sell existing NFTs
in a second but I feel like we should address the question that everyone wonders when seeing
these ridiculous numbers and that is what's to stop someone from just taking a screenshot
of that digital asset and the simple answer is absolutely nothing.
Now I'm not here to argue the value of this type of digital art because honestly that
is a whole video in itself but the token example that is given is sure you could take a picture
of the Mona Lisa or you could even go online and buy a very accurate replica of that priceless
painting for a pretty low price.
And yes you could hang that on your wall, and probably get the same amount of enjoyment
out of it…
But despite all of that this still isn't the Mona Lisa.
So with NFTs it really all comes down to the verifiable ownership, the collectability,
and perhaps most importantly the social status and that last reason is exactly why people
are buying these low-resolution pieces of art and making them their profile pictures
on social media because in a sense it is now a status symbol.
It's the same reason why people go by name brands that have very similar utility to a
generic product but the brand is the status symbol and in a more relatable sense, it's
the same reason why 12-year-olds buy Fortnite skins and dances on their favorite video games.
It doesn't make you any better at the game and it isn't going to improve your ability
to play the game but it is in a sense a small status symbol because everyone can verify
that you in fact did purchase that digital asset and in this case verified that you did
purchase and own this piece of digital art.
So with all of that being said, I'll wrap this part of the video up by saying that I
personally think that 99% of the digital artwork stuff and the prices that it is selling for
is kind of ridiculous and most of it will probably be worthless once the hype train
dies down but there is some really cool digital art and it's the principle behind this that
I love that could open up a whole new world of digital assets.
Okay but putting that whole thing aside, how do you actually go about buying an NFT, selling
NFTs, and maybe even minting and selling your own pieces of digital art.
Well, there are a million different ways to go about this but by far the most popular
marketplace for buying and selling NFTs is a website called Open Sea.io.
This one website allows you to explore the latest trends in the NFT market, and even
connect your own crypto wallet and start buying and selling NFTs pretty easily.
So if we navigate to the open sea website and click on the explorer tab in the top right
corner, you'll see a ton of NFT's that you can buy and sell.
You can also go to the stats tab and see which end of teams currently have the highest volume
and are selling for the highest prices but the most interesting tab and the reason that
you probably clicked on this video is the create tab.
From here you can link your Ethereum wallet with a number of crypto exchange options and
from there it is really easy to upload your digital artwork and listed for sale.
Now I'm no artist personally but if we go back to the explorer tab, I’m going to click
on a piece of art that I think is pretty cool looking and you'll be brought to this page
where you can either buy it now or make an offer on this NFT or depending on how the
seller has set up this listing, there may also be an auction-style format where you
can actually place a bid on this digital asset.
Now all of the listings on this site are in ethereum and they do give you the conversion
into U.S. dollars but again that's why you need to connect your ethereum wallet in order
to not only list your own NFTS but also buy and sell them.
Okay so the process and steps involved in buying and selling them is pretty easy but
how do you actually find ones that will appreciate in value and can you realistically make money
by buying and selling these digital assets.
Is it possible... absolutely… is it realistic that you're going to become the next NFT millionaire...
probably not.
That being said let's try anyways so one website that I would highly recommend you check out
is called rarity.tools and this site is going to give you a glimpse into the latest trends
in the NFT space, help you identify projects that are trending and have a strong community,
and hopefully help you buy or mint an NFT early enough that you can eventually turn
a profit on them.
So definitely check out the reality tools website and then once you find a project that
you believe in you can go back to the open sea website, find that NFT and go ahead and
make your first purchase.
So as you can probably tell the complement of tools that have been built to support the
NFT marketplace are pretty intuitive and easy to learn and the process of buying and selling
and even minting your own NFTs is pretty straightforward.
However, there are a few things that I feel I should mention that you definitely want
to keep in mind before you go dumping your life savings into the latest crypto punk.
First of all, this probably goes without saying but this is incredibly volatile not only because
it is based on the ethereum network and therefore prices fluctuate just based on the price of
ethereum, but also the price of a particular asset also fluctuates so in a sense you have
double the volatility.
Another thing to keep in mind is that these NFTs are not as liquid as other forms of crypto
investing.
For example, if you own one Bitcoin well you can pretty easily sell that at any time to
liquidate that position.
But when it comes to NFTs, again this is a digital asset and therefore you will have
to find a buyer for that asset in order to make that sale.
Now depending on what NFT you own that might be pretty easy but just like selling a car
or a house, this isn't necessarily a liquid asset and therefore it can take some time
in order to actually turn that NFT into a liquid currency.
And the last thing I will mention is that at least for the time being buying and selling
NFTs is really expensive and that alone can make it incredibly difficult to actually turn
a profit.
Now, these fees are twofold but the first and most commonly known fee is known as gas
fees and this is literally a fee that goes towards covering the energy required in order
to process and validate your transaction.
I know that sounds incredibly confusing and honestly, that gets more complex than I really
care to get with the blockchain but long story short, even if you're only spending a few
hundred dollars on an NFT, you could spend even more in gas fees than what you actually
pay for that digital asset plus exchanges like Open Sea are going to charge fees themselves
so just keep it in mind when making your purchases because at least until etherum 2.0 comes out,
these fees are going to remain very high and in some cases, you would need to more than
double your money just to break even on some of these transactions.
So I know the NFT space can seem really weird and confusing and if you’re like me then
you may even have a fear of missing out.
But hopefully, this shows you that it actually isn't that hard to get started buying and
selling NFTS and even listing your own digital assets for sale but as always, use caution
with this and remember that if it was super easy to make millions of dollars overnight
then everyone would probably be doing that.
All again say that I believe in the principle behind digital assets and I think that there
is a ton of value in that going forward especially with ethereum's ability to handle smart contracts
and other awesome crypto projects but personally I don't get the hype behind multimillion-dollar
pieces of digital art that honestly I probably could have made on my own.
But hey just like physical art in the physical world, the value of digital art is subjective
and I'm not going to fault anyone for making a lot of money by selling their artwork online.
So I would love to know what you think of the NFT space and what your favorite digital
asset currently is down in the comment section below.
As always if you did get value out of this content and you want to help support me the
easiest way to do that is actually by checking out some of my favorite financial tools down
in the description below including one offer from the point cash back debit card that will
currently give you $100 when you sign up and make your first purchase so be sure to check
that out using the link down below.
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in the future and of course, thank you so much for your time I really do appreciate
it so much take it easy and I'll see you in the next one!!