8 tips about NFTs for beginners to make you knowledgeable in this new trend. These tips won’t make you professional in NFT Market but will give you the basic knowledge.
01. Purchase NFTs that you enjoy
Always purchase an NFT that you truly enjoy. Consider this: if the value of the NFT declines, will you still love it, or are you merely buying it for the possible profit?
It’s easy to get hooked up in the concept of being wealthy quickly. According to a poll conducted by Hiscox Online Art Trade Report, 82 percent of NFT buyers were driven by the prospect of making a profit rather than the art itself. Surprisingly, the women’s poll was more likely to prioritize the value of the art over the NFT’s potential profit.
02. NFT advice: purchase the utility
If you’re unsure about an NFT’s aesthetic worth, evaluate its utility, or more specifically, what access or usage this NFT – the smart contract that underpins the art – can provide.
NFT art can be utilized for various purposes, including film financing and educational platforms. NFT gamers may benefit greatly from this new technology.
An NFT’s usefulness could be for community access, real-life events, video game materials, or even a real-life wearable.
Crazy Skullz, for example, is raising money for charity and purchasing metaverse land for NFT owners.
Some NFTs put revenues into a fund to support new initiatives, gallery events, and artists, so you can feel good about buying one.
03. NFT pointers:
If something sounds too good to be true, it probably is. Be careful of email and social media scams, as with anything else. Be wary of anyone who gives you an NFT at a very low price or offers you one for free.
Look into the seller’s or project’s history, how long it’s been around, who’s bought it, ask questions of others, and join Discord and social channels to learn more about the project.
Never give up your wallet or bank account information to someone who approaches you out of nowhere.
Keep yourself secure online by doing your homework on who is selling and what the endeavor is about.
04. NFT advice: help young/new artists
There are a lot of new creators coming into non-fungible tokens, and part of the excitement around NFTs is seeing how artists who would never be able to make headlines or get a gallery space are selling NFTs. Artists, such as Beeple, are pioneering new forms of expression using NFT Technology.
However, remember that investing in an artist is a personal decision. Invest in NFT artists you enjoy or believe have something to express. Following trends isn’t always a good idea, so pick artists you enjoy and invest from a personal standpoint.
Following and investing in NFT artists dedicated to NFTs is a nice piece of advice. These artists will be working with NFTs and smart contracts, and they will frequently have unique ways to exhibit their work. Remember that art is about concepts.
05. NFT advice: don’t sell an NFT for a profit.
Realistically, we wouldn’t recommend trying to benefit from an NFT flip. We’re back to Tip 1: if you don’t like the art, the concept, or the NFT’s application, you’re setting yourself up for failure. You’ll also need to learn about NFT cryptography.
If you want to make money flipping non-fungible tokens, you’ll need to learn the dos and don’ts. Basically, you acquire an NFT at a cheap price and then sell it for a higher price.
You’ll need to keep track of impending NFT drops and try to spot the best new projects.
The proverb “buy the rumor, sell the news” applies here, which means you’ll need to conduct a lot of research and educate yourself in the NFT realm if you want to make any money flipping NFTs.
Even if you do your homework, be wary of the pricing. For example, the Moonbirds comes from a reputable team, but the mint price was excessive. To be honest, flipping NFTs is quite difficult for beginners to learn, and we wouldn’t recommend it.
06. NFT pointers: be aware of gas prices
By Knowing what gas fees are and how to deal with them will save you money on transaction and minting fees. Gas fees are payments made on the Ethereum blockchain to compensate for the energy required to construct an NFT.
You can set a ‘gas limit’ on any purchase to ensure you don’t overspend. Gas fees fluctuate as more or fewer Ethereum transactions are done, so pick your time — 9-11 pm UTC is usually the cheapest.
One thing to be cautious of is converting ETH into other cryptocurrencies in order to purchase NFTs on other blockchains; this may be expensive when dealing with currency, and you may find yourself in a scenario where the gas fees surpass the value of the NFT.
If you’re serious about NFTs, you should look into gas fees, how they function, and how you may save money. There are NFT artists worth looking out for and following on social media who will provide advice. For example, Will Paper on Twitter has an excellent series of Tweets on gas fee advice:
07. NFT hints: deciphering the data
While it’s difficult to predict if an NFT will appreciate in value or whether the art will be successful, there are several vital factors you can look for to ensure the NFT you acquire isn’t worthless or to identify a phony NFT.
Some of these are noted below.
Remember that when selling an NFT, these details are also important. Consider whether your NFT meets these requirements, as this is what people will be looking for. This information can assist you in determining who is purchasing NFTs.
So, let’s look at the key characteristics of an NFT.
Understand the fundamentals
Follow the artist on social media or join their Discord server if they have one, and don’t be scared to ask questions. Seek advice from others on social media; have they heard of the artist? Is the NFT’s creator paying for social media ads to generate buzz artificially? If yes, then it might be a red flag.
Compare price data and transaction volumes, such as OpenSeas statistics with Etherscan transactions, and track prior buyers. Do they go together? Don’t buy if you have any doubts.
Examine the scarcity
The lower the volume of uncommon or scarce NFTs in a project, the higher the mint number (which might range from 1500 to 10,000).
This can lead to more stable prices, as the NFT’s price is less likely to rise or fall sharply (though it can), and these are often more accessible and enjoyable to invest in.
Examine the starting price.
Most NFT marketplaces will display a floor pricing value to indicate how much the NFT project is worth.
Some items in the NFT project are selling for less than the floor price, while others are selling for more.
Remember that NFTs lose value over time, so keep track of projects you like and purchase when they reach a comfortable price. During a whitelist phase, keep an eye out for NFTs by following artists, participating in the project, and researching. Before the public sale, when the floor price can be set, you’ll obtain the NFT for a great price. (Of course, the value can fall, so we’re back at Tip 1 again.)
Volume of trade
This displays if people are buying or selling these NFTs at a glance. This is only important if you’re looking for quick profits; if you’re buying NFTs because you enjoy them, it doesn’t matter.
However, it shows an immediate interest in an NFT and can indicate general patterns and types of NFTs to hunt for or even build. Sites like nonfungible can provide a quick overview of volume data.
08. NFT pointers: master the tools
Etherscan and other NFT market data tools can tell you if a project is good, popular, or even a potential scam.
We’ve already discussed Etherscan, but it’s only one of several tools available to assist you in finding new NFTs and making purchasing selections. Nansen.ai and Dune.xyz are two other tools. Etherscan, for example, is an independent website that tracks Ethereum blockchain transactions.
If you follow a collector, you can check past transactions to see if an NFT is genuine, and pending transactions can be viewed to see what is being purchased.
Remember to combine this information with NFT marketplaces and social media to check that an NFT is being purchased. And not a free drop (scammers like to create false hype by dropping free NFTs into collector or influencer wallets.
Disclaimer: The ideas represented in this article are for general informational purposes only and are not intended to provide financial or investment advice or recommendations for any particular investment product to any individual.