What Is An NFT And Why Should I Care? Pt. 3

OK, so I know I said I would do these weekly, but I got busy. Sue me. I’m an attorney; I will OWN you in the courtroom. But at this point hopefully you have read Part 1 of this series where you learned about what an NFT was, and Part 2 of this series where you learned how to set up everything you need to buy your first NFT.

In this final Part 3, hopefully I can give you some information you need to really integrate into the NFT world and answer some frequently asked questions I’ve gotten from people new to the space. So without further ado, here is some information for all new people to the space to help you get connected in the community and have a good experience.

Am I Too Late?

People often ask if this is a bubble that has reached (or is close to) the top. I obviously wouldn’t be dedicated so much of my time and career to the space if I thought it was, but one helpful thing for me was looking at the above data. As of August, 2021, there are only roughly 200,000 monthly active wallets on Opensea, which is BY FAR the largest NFT trading platform that currently exists. At the same time, Coinbase reported having 6.1 million active users in the first quarter of 2021 and MetaMask reported having 10 million active users in August of 2021.

In other words WE STILL EARLY. There is a giant group of people who are actively involved in cryptocurrencies who haven’t dipped their toes into NFTs yet. This is in addition to the millions of people who aren’t involved in cryptocurrencies but like to play video games (multiple AAA NFT video games are set to release in the near future from major gaming developers), collect art (which is a multi-trillion dollar industry each year), or otherwise have an interest which intersect with NFTs. This market is so young still, that if you are reading this in 2021 or 2022 I can guarantee you are still very early.

Are There A Bunch Of Scammers/Hackers/People Trying To Rob Me?

99.9% of people I interact with in the NFT community are genuinely nice and helpful people who form communities around the projects they buy and who support each other. It’s not uncommon for NFT Twitter to start with “GM” (Good Morning) and have hundreds of “GM”‘s in response. But that remaining 0.1% are both creative and relentless assholes who WILL try to take advantage of you. Here are some tips to stay safe.

  1. Get a cold storage wallet (ledger). Anything you don’t plan on using/selling in the near future goes on it. Just check to make sure the NFT is compatible (can’t put Zed horses on them, for example). Buy directly from manufacturer. Do not buy on Amazon or Ebay!
  2. Sign out of everything unless you are using it. This includes disconnecting your Metamask from sites after minting/if you aren’t using that site.
  3. Never ask for help from discord help channels. Go to actual site/developers directly.
  4. Never trust a Discord DM. The CEO of Opensea is not DM’ing you out of the blue. I promise you.
  5. Don’t click on links from untrusted sources or google ads.
  6. Always get links to unverified (AKA, New) Opensea collections from developer or the project’s official twitter. Don’t try to find unverified project in Opensea search bar.
  7. NEVER EVER EVER EVER SHARE SEED PHRASE FOR METAMASK QR PASSCODE OR SHARE SCREEN WITH OTHERS.

If you do all of the above, you should be safe. Just be cautious. If it looks fishy, trust your gut. Pay attention to Twitter so when a new scam pops up, you don’t fall victim to it.

What Is All This NFT Terminology?

I was going to go through the task of trying to distill all the unique NFT lingo used in Discords and on Twitter, but I luckily already ran into another Twitter user that did it for me! Huzzah! This should cover a vast majority of the terms you should know.

What Is Gas?

You will learn to both understand and hate “Gas” the more you interact with NFTs. Most NFT’s are built into the Ethereum blockchain. Anything done on the Ethereum blockchain charges a transaction fee, AKA, Gas. Gas varies based of demand on the network at the time. This means during the day (approximately 8AM-9PM EST) Gas is often higher than very late at night or very early in the morning, because there tends to be less transactions at that time.

This also means every time you want to buy an NFT, you will be paying the cost of it plus Gas. Every time you want to list an NFT for sale, you will need to pay Gas. Every time you want to de-list an NFT for sale you will need to pay Gas. Every time you convert one form of crypto into ETH you will need to pay Gas. During an NFT “Drop” often there will be things called “Gas Wars” where people increase their transaction’s Gas to basically cut to the front of the line of people buying. Gas is the bane of virtually every buyer’s existence but is the unfortunate consequence of having all information verifiably true and proven on the blockchain.

There are some transactions which are done on a second layer of ETH (such as the matic/polygon network that Zed.run and Chicken Derby run on) which allows you to convert ETH to a certain layer of WETH and allows for “Gas-less” transactions. The conversion costs Gas, but transactions after that done in WETH don’t require any more transaction fees. Otherwise, you will learn how to handle Gas as you get more and more sophisticated with the NFT buying process.

What Is a Drop?

An NFT “Drop” is the initial, primary sale of that NFT. Often times they are done on a website managed by the project’s development team, but sometimes it is just done directly on Opensea. Each Drop is unique and are done in different ways. Sometimes there are “presales” where early or valuable members of the project’s community get first dibs on getting a limited supply of that product. Sometimes they are released at a set time, and sometimes they are done during a time-window to prevent the aforementioned Gas Wars.

Details on a drop can almost always be found in that project’s Discord in either the Announcement or Q&A sections. Always go to the Discord and if something is unclear, ask questions to the community. You will almost always be able to get any information you are lookin for. For your first Drop, I HIGHLY suggest you go for something which is either not especially hyped up (so around 1,500 discord members or less preferably) or which you can get a pre-sale for. Nobody wants their first drop experience to be one where you pay $300 in Gas, and then walk away with no NFTs.

Conclusion

There are about a billion things which I have not covered in this three-part series which would be valuable for a newcomer to NFTs to know, but with my billable rate you all can’t afford for me to go more into depth on all of that. You should have enough resources now, though, to get started and gather the information yourself. I know it may look complicated and daunting right now, but once you get your feet wet you will be swimming in the NFT ocean in no time. Trust me, there are some VERY dumb and not technologically savvy people in the NFT world, so if they can figure it out so can you. Best of luck on your investing, and if you used these articles as a resource I expect free trips on your Yacht after you make your millions. I feel like that’s justified. This advice was A+.

If you have any questions or would like me to write about anything else, let me know on either of my twitter pages! As always, I am an attorney, I am not your attorney. For legal advice, you should always consult (and pay for) an attorney.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: