What are Crypto NFTs?
by S Beez on Mar 11, 2021
You may be seeing the craze around NFTs right now. Everywhere you look on Clubhouse is an NFT room. People going crazy over NBA Top Shot. You might not even know what an NFT is. So let me explain. An NFT is a non fungible token that can never be duplicated, replicated, destroyed, or divided. Once there have been a set amount of tokens made, there can never be anymore created. This is possible because of blockchain technology. Since NFTs run off of the blockchain you are able to see the full sales history of every NFT.
NFTs are digital assets that typically hold value because they are rare collectibles. Typically they hold value, but this is not always the case so don’t assume that long term the NFT that you buy will appreciate in value. NFTs come in many forms. Digital land, Sports Cards/Moments , Artwork , Beats, Songs, etc. I think that there will be many new NFT use cases over the next few years.
The NFT craze really took off in 2017 with CryptoKitties. CryptoKitties were an NFT where users were able to bread their digital kitties to create new ones. The original generation 0 crypto kitties were extremely sought after and the most expensive CryptoKitty sold for 600 Ethereum ($170,000) at the time. A little known fact is that the team that started CryptoKitties also started NBA Topshot. CryptoPunk is the first digital art NFT, there were only 10,000 punks made. They are extremely valuable and currently selling for a minimum of $33,000. If you don’t believe me check out the Cryptopunks for sale page. You can learn more about the history of Cyptopunks here.
NBA Topshot is a company that has partnered with the NBA to license NBA player highlights via NFTs. NBA Topshot has become extremely popular and is proving that digital trading cards are the future of physical collectibles. With NBA Topshot you can buy a pack of digital “cards”, they call these “cards” moments. You can hold on to your moments or resell them to other collectors on the market. The highest sold NBA Topshot moment was a Lebron moment that sold for $208,000.
You can watch a NBA Topshot pack opening here to get an idea of what Topshot is .
How you can capitalize
We are really early in the NFT space which allows for you to capitalize on NFT collectibles that you can acquire. Although we are early in the space keep in mind that we are also in a bubble. NBA Topshot lowest price for a moment went from $1 to $35 in only a month . CrytoPunks lowest prices went from $100 to $35,000 in only a month. I’ll get into why this isn’t good in a second but first i’ll list some ways that you can capitalize.
- Buy the NFT for retail price then resell in the marketplace
- Buy undervalued NFTs then resell in the marketplace
- Create NFT content on Youtube and Twitch about NFTs. Build an audience and profit.
- Keep an eye on new NFTs that have strong community and strong company partnerships.
What You Should look out for
Since NFTs are extremely popular you will see more and more celebrities and influencers talk about them and even release their own NFTs. Celebrity/influencer NFTs are the worst purchase that you can make. Logan Paul is currently NFTs that are videos of him opening pokemon cards. You will be basically setting your money on fire buying NFT like these, so stay away from those. You will also see new NFTs pop up that are overpriced. I don’t recommend you to spend thousands of dollars on a single NFT unless you are knowledgeable about the asset and understand the risk that you are taking on. Since we are in a NFT bubble and NFTs are illiquid, when the bubble pops you don’t want to be left holding on to the random NFT that nobody is willing to pay for. This is what happened with CryptoKitties in 2018, so don’t get caught holding the bag.
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Thanks for reading. If you want me to make a basic crypto guide reach out to me on Twitter let me know.