Will NFTs last and which ones should you buy? – What to look out for and what to avoid with NFTs.
In this article, I am going to be answering the question “Will NFTs last and which ones should I buy?” . I will also talk about what you should be looking out for and what to avoid before you buy or sell an NFT.
If you’ve been following the news especially in the last year, you have no doubt heard about NFT’s, as well as the eye-watering sums of money that have changed hands in recent NFT transactions.
Some that made the headlines in the last year include the Nyan cat Gif NFT being sold for $600,000 dollars in 2021, a digital image by Beeple selling for $69 million at a Christie’s auction, Grimes the musical artist selling a 50 second video clip for $390,000, the Gucci ghost GIF selling for $3,600 and Jack Dorsey the founder of Twitter selling his first ever tweet for $2.9 milllion.
The Gucci Ghost last sold for $3,600. GIF by Trevor Andrew.
The market for NFT’s has grown from $41 million in 2018 to $3.0 billion in 2022 and is expected to reach $13.6 billion by 2027.
By this point you are no doubt wondering exactly WHAT on earth an NFT is and what makes it so valuable especially when all it takes to view one is an internet connection!
Well, let me try to explain. NFT is short for Non-fungible token. It is basically a token that contains an item’s ownership and copyright information and acts like a digital certificate of authenticity.
I know that doesn’t make that much more sense either and so I’ll explain further by telling you what the difference is between a fungible and a non-fungible item.
When something is fungible, it means that you can swap it for something else that is exactly like it. For example, you can swap a $5 bill for another $5 bill or for five $1 bills, and the value would be exactly the same in both instances.
When something is non-fungible however, it is unique and cannot be replaced by anything else like it. Using our earlier example, the very first $5 bill ever printed (complete with date stamps and certificate of authenticity) would be non-fungible because there can only be one copy of the very first $5 bill ever printed. You could get your hands on the second ever $5 bill ever printed, that could also be valuable and would probably look exactly like the first one ever printed, but it still would not be viewed as identical to it or directly exchangeable for it. Other types of non-fungibles are original pieces of artwork, a signed first edition of a book or a one-of-a-kind trading card. You get the idea by now.
There’s all kinds of NFTs. You have NFTs in Art, music, sports trading cards, virtual land, in-game collectibles and even real-life collectibles.
Beeple’s collage, Everydays: The First 5000 Days, sold at Christie’s. Image: Beeple
The information that is recorded in an NFT basically lets a creator digitally “autograph” their art. It means that even if an image or piece of music has been shared hundreds of times, if you buy the NFT, you’re buying something unique. Each token is recorded in an immutable ledger, using the same blockchain technology that’s behind various cryptocurrencies. Most NFTs are part of the Ethereum blockchain and it keeps track of who’s holding and trading NFT’s.
People buy NFTs for all kinds of reasons including being able to have bragging rights, status symbols and to make investments.
Now, you’re probably saying, “This is all nice information to have, Marc but how do I make any money out of NFTs if I’m not a celebrity, an insanely popular influencer or a world-renowned artist?”
There’s a bunch of different ways that you and I can play in the NFT market and make a solid income from it.
The best training that I have ever used on NFTs and one which has made me about 20k in profit so far is this one HERE, it REALLY does work and is easier than you would think. I made 1600 Dollars on my first deal on the first day I bought the training!
I’ll briefly explain some of them below:
Where you buy an NFT for a lower price and then resell it for a profit. This is usually in the very short term like within days, weeks or months of buying. You could even resell an NFT on the same day you bought it and make a profit, depending on which communities you belong to and how well you are able to market it.
You can make money through buying and reselling NFTs
Buying and holding for long-term investment
You can also but NFT’s and hold them over the course of the next few years or even decades as they appreciate in value, pretty much the way you would with stocks. For instance, Cryptopunk #3100 was bought by someone in 2017 for just under $2,000 and then sold in March 2021 for $7.58 million. When you invest in the right NFTs, buy-and-hold strategies can turn out to be very profitable.
Making and selling NFT’s
You can create and mint NFT’s of your own and sell them on the open market and to the communities that you belong to. The good thing is that as the original creator, you are entitled to royalties, each time one of your NFTs is resold.
You can create and sell your own NFTs
That being said, there are a few things to consider before you take the plunge into buying your first or even your 100th NFT:
- The NFT market is very volatile and highly unpredictable and while there are people who have made money from investing in NFTs or flipping them, there are many more that have lost thousands to the market.
- Minting NFTs currently requires very high levels of energy consumption which is something that a lot of people are concerned about
- The market is relatively new with a lot of people throwing tons of money at it and so it can be very difficult at this stage to figure out which NFTs have good long term investment potential and which are just a flash in the pan. It is predicted that about 97% of the NFT projects currently in existence will eventually fail and go to zero. If you want to find out more about NFT’s and how to pick the right ones, take a look at this course for in depth training on how to invest in and turn a profit with NFTs.
- Make sure that you have strong password security and two-factor authentication on your NFT accounts as they can be stolen just the same as cryptos can.
Learn what to look out for before you buy an NFT
- You can’t store the individual assets in the blockchain ledger — the ledger stores the token, not the item itself. Your NFT contains something like a URL link to the item you’ve bought.
This means that the original file of your digital art will be stored somewhere else. What happens if that file type stops working, or the data gets corrupted? Or the domain goes bankrupt and ceases to exist?
As a buyer, you’ll need to find out where your asset will be stored and take steps to ensure the company hosting your asset will maintain it.
- Dodgy NFT owners can do something called round-tripping and sell and resell the same NFT to themselves multiple times just to artificially inflate the price of the NFT so that it can fetch a much higher price than it is really worth on the open market
- Know that when you buy an NFT, you probably will not own the copyright to that art. In many cases, the artist retains the copyright and can claim royalties when the item is sold. Each token contains something called a smart contract, which sates clearly what rights the NFT owner has. Some NFT buyers don’t understood this, and buy believing that they’ll be able to do whatever they want with their NFT.
Make sure you understand what terms are involved and that they suit your purposes before you buy.
That being said, I personally think that NFTs are here to stay and there are people who are investing in the NFT market and seeing success. So if you are interested in learning more about how they are doing it you can take a deeper dive into all things NFTs here.
I hope that this has helped you understand the world of NFT’s a little better and answered your questions about whether or not the NFT trend will last. I also hope that it has given you ideas on how you can participate in it from where you are right now, while keeping an eye out for potential pitfalls in this very new market that is in many ways still like the wild west.
Till next time my friend.
To your success,
Marc and team.