This is looking to be one of the best years in adopting NFTs into the mainstream. Last year was more of an influx of people looking to make money as fast as possible before people learned the improvised Supply & Demand v.s. Utility (usability) in the NFT market.
Whether you’re brand new to NFTs or if you’ve taken part in it just enough to understand the market and be profitable, these 11 tips should help you to transform not only your strategies but perhaps allow you to avoid making any mistakes that might end up costing you money.
This article is geared toward those that want to buy and trade NFTs as well as participate in the culture.
Disclosure: I am not a financial adviser, and this article is not financial advice. If you need financial advice, speak to a qualified and certified financial adviser. The following are my opinions and how I currently see the NFT world and market.
Verify and Be Wary of Influencers
Verify and verify more because right now, everyone wants to become an influencer on not just specific cryptocurrency tokens (if you don’t believe me look up Shiba Inu News on YouTube). There are an unprecedented amount of unverified news sources that could be spreading false information.
What’s their intention?
- They usually try to create a bullish (positive) outlook on a token or project.
- They are creating a false narrative around a project.
- To pull the price down or test the development team’s responses.
It’s usually a good idea to be listening to the development team, vetted angel investors, vetted influencers that are somehow affiliated, or mainstream (unbiased) news sources.
As much as one would like to think that a YouTuber with 5K subscribers has all the answers, many of the statements they make are based more on opinion or estimated conclusions than facts.
It’s generally good practice to follow as many social media accounts as a project offers, even if you don’t always check all of them.
This brings me to the next point, LEARN HOW TO USE DISCORD. Time after time, I find myself in projects with 20K+ people in their Discord, unsure of where to send certain messages, use certain features, or even how to use the platform as a whole.
Usually, this results in thousands of messages flooding channels, causing more confusion and making it more difficult for the community moderators to answer the questions being asked without making a group announcement. You can see how this ripples into creating even more problems.
The best thing I can tell you is to be ready to face this but to do as much as you can to not contribute to the problem. Because realistically, all of these procedures are bound to get more complicated.
With Web 3.0 technology rapidly advancing, verifying your wallet in a Discord channel (among other things) will seem easy when the first iteration of Web 3.0 will be unlike anything we’ve had with previous iterations of the web.
As with anything else, how steep this learning curve is depends on how dedicated you are to not falling behind.
Understand Art and Utility
This next one should be pretty obvious, but when choosing a project you wish to invest in, the artwork, utility, or accompanying audio or visual elements should always precede any “hype” or relation to another project.
The amount of “Apes,” “Punks,” “Kongs,” and Shiba Inu-related projects with minimal differences between them is honestly pretty ridiculous. Everyone needs to know that maybe 20% of current projects will realistically survive the next 5-10 years of economic change.
In the same way, not all 18,068 cryptocurrencies will survive. The problem is not only greed but also the ability to improve on the base technology we’re investing in right now.
All blockchain technology is bound to grow beyond what we can imagine; this means that a lot of development won’t happen with these projects that were made as a cash grab.
And as supply and demand typically work, there will be a massive imbalance in the demand when there are very clearly better things to invest in (one might also assume this would be the “bursting” of the bubble in this market).
So, I urge you to carefully consider all aspects of the NFT you’re buying; there’s nothing wrong with just holding a blue-chip project that has real growth plans.
Plus, there are numerous fun things you can do with NFTs, as evidenced in this article: 9 Things to Do With NFTs After Buying Them.
Learn Gas Fees
I won’t lie; this next tip does require a bit of knowledge and research to utilize fully. However, you should hear it here. Gas fees (transaction taxes), especially on the Ethereum chain, are very high as of right now.
Without falling too deep into the rabbit hole of why this is, I will say that understanding how gas fees work is crucial to saving money.
For example, I went to mint an NFT from a project I like very much (Divine Anarchy), and when I got to the part where I needed to accept the transfer from my wallet, I very quickly noticed that the gas fee for this transaction was three times the cost of the actual NFT (I waited for public sale on Open Sea).
But what can you do about this? First of all, the project team should monitor gas fees and not mint during high network usage and high-cost times, but you can’t rely on that.
So as a beginner, the easiest way to monitor the network is through the Etherscan Gas Tracker.
For those who don’t know, Etherscan is the official way to monitor most of everything happening on the Ethereum network. And yes, these websites exist for all major Blockchains.
CoinMarketCap also has this information if you’re like me and like all of your data in one place.
If you really want to expand on the minting topics, you will want to read these three articles:
- What is the Average Cost to Mint and Sell an NFT? (Top Marketplace Examples)
- Can You Lose Money By Minting NFTs?
- The 3 Cheapest Ways to Mint an NFT: Full Breakdown
Don’t Get Scammed
This next topic pains me to talk about because it’s perhaps the biggest concern with all blockchain technology right now. We’re going to talk about scams.
(This also plays back into learning Discord because that’s really where the scammers try to get you the most.)
Whether it’s a Direct message claiming “you’ve won a free mint and all you have to do is pay gas fees” or the more advanced ones where they get you onto a fake website where a wallet pops up that is very realistic, up until you put your login info into it just in time to realize it’s a fake being used to collect information.
There’s a wide range of ways you can get scammed. Most projects will tell you, “WE WILL NEVER DM YOU,” which you might miss in the Discord or forget later on if you haven’t been scammed yet.
Heed these warnings because sometimes a minor attack or small data breach can lead to things you might not consider at this moment.
Especially with Cyber Security being at the forefront of national security currently, educating yourself before putting yourself in a bad situation is beyond important.
Forgeries, Copies, and Fakes
This reason also has to do with scams (unfortunately); just as before, where 100K people break things, you can bet a very high percentage of that group are scammers, and you can very easily find your messages filled with “free mints” and ” early mint list’s.”
As a first step towards finding a reasonable price, look at other projects or industry normalities. If you’re buying an art piece with no utility other than the art, research must be done to avoid buying fakes or getting ridiculously overcharged.
It’s so fricking easy to make a copy of a piece of art, mint it and sell it to an unsuspecting newbie. Most secondary NFT platforms attempt to combat this nasty practice but be sure to do your due diligence.
Name Brand Projects Have Risks
The next point I’d like to speak on is one more-so for the new people, but I do feel that everyone can benefit.
While a project having a high mint price does allow for some security in not only the quality but also the target audience (holders as opposed to flippers).
I would not recommend getting into high-mint price projects without a decent amount of market exposure and research. There are a few reasons for this; first of all, usually, these projects have a “Name Brand” endorsement of some kind.
This means the socials for this project are full of all different types of questions, comments, and concerns at all times. So being able to speak with any team member is difficult, if not impossible.
Second, technology breaks when you overload it, a Discord with 100K+ members will break frequently. Mints for these projects can literally slow down a whole network with the amounts of bots and requests coming in.
I’m not saying you don’t take an interest in these projects, but rather know they can come with challenges and, in the end, cost you everything you have invested.
To help clarify pricing and where you should even really be looking, I’ll give you my next tip. The metaverse is what’s in focus right now (for all aspects of the blockchain).
You know something had a grip on a market when both Walmart and Mcdonald’s decided to dive headfirst into it (among other companies).
As a result of this, the entire market is looking to the metaverse as where the “smart money” is headed.
This means that virtual real estate (NFTs that show ownership of digital land), as well as projects like Star Atlas that give you the ability to stake your NFTs for a native currency, are in high demand.
I can imagine because of that; there’s going to be a time when many projects will claim to do the same, and there’s going to be a frenzy trying to find the “best option.”
In my opinion, it’s more about sustainability than being the best, just like with regular video games. Discernment is still needed to avoid rug pulls, but focusing your time on a game or metaverse-based project should prove majorly beneficial…I hope.
The music industry is also going to benefit from blockchain technology as well. But the music industry will probably wait for more updates and growth.
As of right now, NFTs can be used for concert tickets, music as a whole (you can mint your music on the blockchain) as well as using NFTs to sell merchandise/fan experience.
After doing substantial research into what’s already being done, I’ve found that Soundblock is way ahead in terms of creating a platform for artists to use the blockchain for music without acting independently.
However, their usage of NFTs (while they’re in their beta phase) could be expanded.
In the years to come, the music industry should be able to solve all licensing and ownership issues by incorporating blockchain and smart contract technology.
Another thing discussed in the blockchain community that I see evidence of daily and very much enjoy making PSA’s about is the amount of FUD (Fear, Uncertainty, Doubt) being spread through communities.
This is me asking you not to contribute to this.
While it is easy to side with people who claim to know what they’re talking about. The anonymity of Discord and the possible anonymity of social media make it a bit difficult to know without (like I stated before) vetted sources.
Contributing to FUD without any fact-based evidence takes the fun out of all of it as well as creates a butterfly effect that could damage the reputation or credibility of a project that you may or may not already have invested in.
So, it not only doesn’t make sense from the standpoint of “you chose to buy this.” It also affects other people, who most likely had absolutely nothing to do with the damage being done.
We created the blockchain to be a force of equality and fairness. Spreading lies and FUD doesn’t contribute to that goal and makes a stronger case for those who oppose it or those who may gain from creating a narrative based on that FUD.
It doesn’t, can’t, and won’t ever actually help anything improve.
Long Term vs. Flipping
To finish off, the last tip is a pretty easy one to follow and keep in mind (especially if you’re new). It’s always going to be better to start with long-term hold projects instead of trying to flip off the bat.
Flipping is possible, and it defiantly is profitable. However, successfully flipping NFTs is an artform on its own. If you have limited market exposure or just simply haven’t done any flipping yet, educate yourself.
How you do this education will vary depending on things like strategy, risk tolerance, and the chain you use to buy and sell. But the factor that remains constant in all of this is the results.
It is very easy to have something of a “dry spell” or simply just bad luck, and these are both costly problems. Watching an NFT lose value is a horrible feeling. The better you can limit these problems, the more successful you’ll be.
However, I believe buying to hold and allowing the market to show you what it’s about is the education you can’t get anywhere but from experience.
Education and knowledge are necessary for any type of success in whatever you do. This is especially true with new technology, blockchains, and Web3. The cool thing is that a large portion of this website is dedicated to educating and motivating our readers.
That being said, it makes sense to keep exploring. We have provided some very popular and viral posts that should help you on your journey. Check out:
- This is Where NFT Metadata is Stored | Everything You Need to Know
- How to Transfer Your NFTs Without Paying Gas Fees
- How To Buy NFTs When They Drop in 3 Steps
I hope you found this article to be of benefit, and I wish you luck in the NFT universe! See you there!