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Buying NFTs 101
Helpful tips for buying an NFT
Hey👋, I’m James and welcome to the SCALE 89 newsletter. My goal is to help people understand technology, software, crypto and NFTs. I’m sharing my ideas, insights and perspective on Tech so readers all over can learn from me. Thank you for reading and sharing my work!
It seems like the last 6 months was filled with NFTs. Social media accounts turned into opportunities to promote and advertise NFT projects. Regular people, companies, and big celebs have jumped on this trend to buy and showcase their NFTs. Some people are selling their JPEGs for over $100K. If you do your research and get involved with the right projects their are opportunities to turn a profit and add more crypto to your bag. I hope my perspective on NFTs can help you get started in this new space!
So how do you buy one?
The vast majority of NFTs require you to have crypto and a crypto wallet. There are some NFTs that allow you to purchase with a credit card, but the majority of top projects are based on Ethereum or Solana which means you will need ETH or SOL. The Ethereum blockchain uses Ether (ETH) & the Solana blockchain uses SOL. Most NFT projects are on Ethereum so you will need to purchase ETH in your digital wallet.
Finding NFT projects
You will find out about most NFT projects on Twitter, Discord, or Instagram. There are thousands of new NFT projects starting all the time from people all over the world so you will need to do your own research and due diligence. Here are some things to consider when finding projects, researching them, and deciding if you want to be a part of a particular NFT project and community.
Who are the founders?
Do the founders use their real names or are they anonymous? This makes a huge difference in trying to determine their experience and ability to run a successful NFT project. Early NFT projects are like small tech startups that are just getting off the ground with a small team. Most teams have 3-10 people at the beginning and if they use their real names, you can do research into them. Do they seem legit? Do they have any relevant work experience? Have they ever worked in Tech? These are all important things to consider when looking into the founding team. I’ve had more success buying NFTs from projects that use their real names.
Social Media Presence:
NFTs basically live on social media as this is how people use them for profile photos and sharing them in posts. NFT owners have an incentive to spread the word about the project with the hopes that the value will increase as more people get involved. You can spend time on the social media for the project and see what you think. Do they have good social skills? Strong posts / memes? Do they create good content that people will share or retweet? We are a social media culture now and the teams ability to execute on social media will determine how well they do.
Spend time on the Discord channel for the NFT project and you will learn a lot about their writing style and communication skills. NFT projects attract people and talent from all over the world that have varying levels of experience. The teams ability to communicate clearly will have an impact. Do they have a harsh tone? Do they respond to questions, comments, and feedback? Try asking some questions in the Discord and see what happens. Does anyone even get back to you?
Step 1: You will need to purchase crypto from an Exchange like Coinbase, Kraken MetaMask, FTX, or Gemini. There are tons of exchanges available now.
Step 2: Transfer the crypto to a digital wallet like MetaMask or Coinbase Wallet. Your crypto wallet will have a unique address and this is where you transfer the crypto. The Ethereum address is a unique 20 digit address where you can receive the funds.
Step 3: Visit an NFT marketplace website and search for the NFTs. Popular options include OpenSea, Looks Rare, and Magic Eden. You can do this within the digital wallet browser (MetaMask app has a browser built in). Please double check the website URL to make sure you are visiting the correct website.
Step 4: Purchase the NFT and pay the transaction fee. If you are buying an Ethereum based NFT, you will need to pay “gas.” The cost of the gas fee can range from $40 to $300+ depending on the day and time. If it is a Solana NFT, the transaction fee is less than 1 cent.
Minting an NFT?
If you are minting an NFT, you are buying it directly from the seller and their website. You are able to mint the NFT until they are sold out. If it is a popular project, some NFTs will sell out in seconds or minutes. After it is sold out, you can purchase it from a secondary website like OpenSea. Please make sure you double check the link before you mint!
Once you have an NFT, some projects give you the ability to stake the NFT on a contract. This means you are placing your NFT on a contract so it cannot be sold for a period of time. Staking is appealing to people that want to hold the NFT and believe in the project for the long term. In most cases, you would earn a token for doing this. The token can be transferred back to ETH / SOL in some cases or it can be used to purchase other NFTs (this depends on the project).
Example: I have two NFTs from Jungle Freaks and I was recently able to stake them on a contract. I am earning 10 $JUNGLE tokens per day for each NFT. I cannot transfer the JUNGLE token back to ETH but I will be able to purchase future NFTs with the tokens. They are currently working on a Season 2 for Jungle Freaks and the tokens will be good for them. This will enable me to purchase future NFTs from the project without using ETH (I will be able to use the $JUNGLE token). If I decide I want to sell the NFT in the future, I will need to un-stake my NFTs from the contract.
Discord is a popular messaging app for building community around a project. Most NFT projects have a Discord channel that you can join. This is a great way to get vital info about the project from the founding team. They will also post project updates, events, images, and more. Discord is also a way for you to connect with the NFT community and met people that share similar interests. Some people are active in Discord all day, whereas, some people just want to check for the important project updates. Using Discord is a great way to learn more about the project and founding team to help you decide if you want to be a part of it!
NFT: Non-Fungible Token is digital artwork that lives on the blockchain.
Mint: A mint is an opportunity to purchase an NFT directly from the artist or team from their direct website.
White List (WL): A list of people and wallet addresses that are given a spot on the mint. This is also known as Allow List. These are coveted spots because you are guaranteed the ability to mint even if there is extreme demand for the mint.
Private Key: When you create an digital wallet with MetaMask, you will get a private key. This is private and you should not share it with anyone. Keep it in a safe space like a password manager.
Wallet Address: This is a public string of 20 characters that is used for buying and receiving crypto or NFTs. This is public and can be shared with others.
Coin: A digital asset that is associated with monetary value like Ether on the Ethereum blockchain.
Token: A digital asset that is associated with a project like the Jungle Freaks NFT token $JUNGLE. It may or may not have monetary value. Many popular NFT projects are launching their own token.
ETH: Short for Ethereum or Ether.
Ether: The digital token used on the Ethereum blockchain.
GM: Good Morning
WAGMI: We Are Gonna Make It
NGMI: Not Gonna Make It
GOAT: Greatest Of All Time
Flipping: The process of buying and selling an NFT for a quick financial gain.
Please read my other articles at the SCALE 89 website
I am a writer and investor based in Washington, DC. I’ve spent over 9 years in Tech and software companies working in sales, marketing, and account management. Right now, I’m focused on tech stocks, crypto, Web3, and NFTs. Thanks for reading my work and please reach out with any questions!
Disclosure: Not Financial Advice / Not Investing Advice
SCALE 89 and The Author does NOT provide financial, investment, legal or tax advice. None of my content (posts, articles, emails, tweets, images, or videos) can be construed as advice. The author is not advising you to buy or sell a security, stock, NFT, or crypto asset. This newsletter, article and my tweets are for informational and educational purposes only. By reading my content, you are acknowledging that this is not advice. Please note that my positions can change at any time. I currently own two NFTs from the Women Tribe project.
Images: The NFT images come from Women Tribe NFT on OpenSea.