Thanks to blockchain technology, there’s a staggering number of ways in which we can link together the digital and real worlds. One such technology is the Non-Fungible Token – or, NFT.
From tech to fashion, law, finance, and sports, every industry has a use for an NFT. Functioning as a “crypto collectible,” NFTs are digital assets that are unique and limited in quantity.
NFTs are also a key building block in developing new blockchain technologies – you may have seen NFTs in a variety of use cases including gaming, fine art, digital identity, asset management, and certificates. Although all these use cases can seem daunting, NFTs have gotten more accessible to use, set up, and issue as the tech and its adoption increase.
Each use case comes for different reasons as to why you might purchase one, as well as what you should look out for in an NFT. In this blog, we will cover what apps and sites to check out for NFTs, how to evaluate a good NFT project, and crypto projects that are worth keeping an eye out for.
The TL;DR on NFTs
A Non-Fungible Token – or NFT – is a type of token on a blockchain that represents a unique asset that represents value. Depending on what code is embedded in them, NFTs can be used as digital assets, tokens, and even real-world assets.
How do NFTs Work Again?
NFTs cannot be directly traded with each other. NFTs are non-fungible: meaning that they are not interchangeable with another asset. For example, you can’t purchase an NFT with another NFT, you have to use a currency as medium for this exchange.
The appeal of NFTs lies in the fact that each one is unique. In the code of each NFT, a unique identifier is embedded as a method to prove authenticity and ownership of an NFT.
For an NFT to be issued, a standard framework must be followed. The most widely used standard for NFTs is ERC-721. ERC, or Ethereum Request for Comments. Not to be confused with technology, platform, a “smart contract”, or code, ERCs provide technical guidance to developers for building decentralised apps, or dApps on the blockchain. ERCs often come in the form of proposals.
For example, ERC-721 is a proposal that has been used to create the dApp Cryptokitties. Each Cryptokitty served as unique digital collectibles, and were worth different amounts on sale according to the users of the platform. Through ERC-721, the developers of Cryptokitties know how to program each kitty collectible to meet standards for issuance.
You also may have heard of ERC-1155. The newer kid on the block, it allows for a dApp, platform, and/or contract to contain and use both fungible and non-fungible tokens. This opens up more opportunities for the use of NFTs – making them interoperable. Interoperability means that NFTs can be used between different applications.
What do I need to buy one?
Purchasing an NFT is now easier than ever. However before you start, you need two things:
- A cryptocurrency wallet
- Some crypto in that wallet in order to pay gas fees
You don’t need a specific wallet to use NFTs. However, you should check out what blockchain you’d want to purchase NFTs on. Wanting to purchase more art? Look for a wallet that supports Binance Smart Chain. Wanting to get into crypto gaming? Look for a wallet that supports Polygon.
Popular choices include Metamask and Trust Wallet, which both support a variety of blockchains. In fact, check out our guide here on how to set up a Metamask wallet!
Keep in mind that with each blockchain comes different gas fees – a mandatory service fee to keep the chain running. Although Ethereum maintains a household name in the NFT industry, gas fees on Ethereum are high.
NFT Guide: Where Can I Find NFTs?
There’s a variety of NFT marketplaces out there to explore. With an abundance of marketplaces, projects, and games, there’s something for everyone.
In general, there’s two places in which you can purchase NFTs. NFT marketplaces, and NFT projects.
NFT art is made on a smaller scale, from individual artists, and is often sold on NFT marketplaces. NFT projects are often produced by larger groups of people or organizations, and are available for trade on their own platforms.
NFT Marketplaces To Check Out
You’ve heard of OpenSea, arguably the biggest NFT marketplace known to the internet. But don’t limit your NFT search to just one sea! Here’s some other options to consider while you’re out looking for that perfect NFT:
The other big contender. Boasting features like high security while also having beginner-friendly UX, Binance NFT Marketplace is where most blockchain users opt to sell. However, if you do choose to create your own NFT, minting options may be limited! Expect to find more resells on here rather than original pieces.
Refinable is an NFT sales platform that is designed to help users create, trade, explore, and leverage NFTs on their own terms. Refinable offers two services for exploring NFTs: Marketplaces for browsing many NFTs across different blockchains, and Storefronts for browsing collections made by artists.
Holaplex is a dedicated sales platform for NFTs minted on the Solana blockchain. Serving as a one-stop shop for the creation and sale of NFTs on Solana, Holaplex is a popular platform for those holding $SOL, as on-wallet NFTs can be imported directly into the platform.
NFT Guide: What’s an NFT Project?
NFT projects are unique collections of multiple NFTs. NFT projects are different from NFT art where projects often produce assets en masse. NFT projects can manifest as a collection of generated profile pictures (or PFPs) for use on social media, and as Play2Earn games on the blockchain.
NFT Projects To Check Out
- Ethermon (Game)
Ethermon is a Play2Earn Pokemon-like game that operates on Ethereum and Polygon. Created and maintained by a decentralized community of artists, programmers, and passionate gamers, users compete to earn via PvP battles. Ethermon also owns Decentraland’s largest game-focused district (668LAND), where the game’s alpha version can be played.
- Art Blocks (Generative Art Platform)
Art Blocks is the first platform of its kind: an NFT project where you can generate computed art on demand. Stored on the Ethereum blockchain, users can pick a style of art they like, pay for it, and will receive a randomly generated piece of artwork from Art Block’s algorithm in their wallet. Each output is different, and can range from a static image to an interactive experience.
- Doodles (Profile Pictures)
Doodles is an NFT community revolving around its namesake NFTs. It’s basically a social club. Holders of the NFT take part in coordinating the group’s treasury, in addition to hosting membership events and campaigns. Boasting 265 traits of differing rarities, each Doodle is a unique edition of 10,000. Although its current floor price is 22.5 ETH (around $60,000) on OpenSea, taking note of Doodles’ popularity can pave the way for influencing future projects.
NFT Guide: What Should I Look for in an NFT Project?
Who’s creating it? What have they made so far? How well are the creators engaged in the community?
Be sure to put effort into looking at who is behind the project! And names aren’t just all – there’s been plenty of fraudulent NFT projects where the creators are saying they are who they are not. See how much the creators are active in the community, and how much they make updates!
Use Case and Community
What can the NFT be used for? What sort of community do you want to join? Check the project’s social media channels, join community Discord servers or Telegram Channels and see if it’s your vibe or not.
Each NFT project revolves around community – once you’re the owner of an NFT, it’s technically your ticket to network with fellow NFT project supporters.
If you’re looking to get into NFTs for a chance to make it big on the resell market, be sure to keep on top of trends. Who is promoting who? How many people are excited for the project? Which influencers or celebrities are in the NFT project’s community?
Beyond looking at social media reputation, don’t forget to check out how many buyers a project has, and the trade volume!
This is where your subjective taste comes into play – and it’s arguably the most important factor in buying an NFT.
Ultimately, your NFT portfolio represents you as a collector. Whether you disregard aesthetics for the sake of investment, or you just want a bunch of cute doodles, each method of curation has their perks and downfalls.
As cryptocurrency and NFTs become increasingly easier to use, the barrier for getting into the new digital economy becomes more accessible.
While blockchains and ecosystems continue to grow, it’s never too late to start getting into making your first NFT purchase. Whether or not you want to be a curator or diversify your investment portfolio, there’s something out there for everyone! Happy trading, and WAGMI (we are all gonna make it!)
Disclaimer: This article does not intend to serve as financial advice. Please buy, sell, and trade NFTs with discretion.