I’m excited to be a part of the Publish0x community, and to be writing my first article! My journey with NFTs has been relatively short, but as they say, a week in the NFT space is like a month or more in the real world. If you are new to the space or are thinking about getting involved in NFTs, hopefully you can learn from some of my mistakes! Here are a few things I’ve learned along the way.
1. Understanding crypto wallets is crucial
If you don’t understand crypto wallets, it’s going to be very difficult to create an account on a marketplace, and maybe even harder to buy and sell NFTs. If you aren’t new to NFTs or crypto, this may sound silly, but when I was a newbie, I just tried making an account on a place like Rarible before I had a wallet set up. It prompted me to make a wallet, so I quickly made a fortmatic wallet even though I didn't understand what I was doing.
I thought I was good. But when I went back to rarible with my metamask wallet, which I kind of understood at this point, I realized my username thedarknite01 was linked to the fortmatic wallet which I couldn’t get into. Creating and understanding crypto wallets before getting started on any NFT marketplace or platform is super important, in my opinion.
2. NFTs don’t just magically increase in value
Again, this may sound silly, but when I first got started, it felt like a gold rush. I was just so eager to buy something and make some quick money. I was buying anything I thought looked cool. I thought surely in a year or two the NFTs I was buying had to be worth more than when I bought them.
Definitely not true.
NFTs don’t magically increase in value over time, the value is derived from people’s demand for the token, or the collection overall. So when I look for NFTs to buy, I look at a lot of factors, but I try to buy things that I think have a lot of longevity, or will hold their value or be more valuable in the future.
3. There is no guarantee of liquidity with NFTs
When you invest money in crypto, even with the most drastic changes in price, you can usually buy or sell pretty quickly. (Unless it’s a total rugpull where you can’t withdraw money.)
But with NFTs, it may not be that easy to sell a token you have. If no one wants your NFT, it is worthless. No matter how much you paid for it. This can be a sobering thought if you were trying to get your money back by selling an NFT you don’t want anymore. Depending on the project, you can usually find a buyer for the right price. It just may not be the price you were wanting or expecting.
4. Anyone can create some cool art, but that doesn’t mean it’s a good project.
One of the first NFTs I bought was this super cool piece of abstract art that looked like a utopia on Mars. The project had good volume but I didn’t notice that by looking at the collection’s stats on the marketplace, the average price had been declining. I thought I was buying at the bottom and the price would shoot up again. It didn’t.
A few weeks later a friend showed me this app they downloaded on their phone that generated artwork using AI technology. I quickly realized what I had bought could have easily been generated on a computer in a matter of seconds. Just because the art looks cool doesn’t mean it took any skill to make. And for this particular NFT project, I looked around their website and noticed there were no perks of holding one, no future plans, it was just the imagery.
This was essentially what the rest of the world thinks NFTs are. Paying way too much money for a jpeg.
Good NFT projects are ones that provide a lot of value to people who own them, and one where the digital ownership provided by the blockchain gives people who bought a token something more than just some cool art.
Thanks for reading!
I hope you found something useful in this article.