Important Things You Need To Know Before Investing In NFTs
Feb 06, 2022 17:48
Thinking on investing in NFTs for the first time? It’s not as easy as people think it is, a lot of elements go into it - it depends on your strategy and why you want to invest in them in the first place. People like to jump on bandwagons and partake in whatever is currently popular, but NFTs are much more intricate. It's definitely something to think twice about, so here are some important things you need to know before investing in NFTs!
Unfortunately we live in a fast paced world, and lots of trends come and go. Whilst it's safe to say that the NFT world is just getting started, there is no clear vision of the future, or whether or not NFTs will be relevant in 5 years. So it's smart to consider that aspect as well. Are you truly interested in certain artists and want to own a piece of art? Or are you just looking to hop on the latest trend and make some money. It's true that a lot of artists made a ton of money by making and selling these tokens, but you shouldn't rush into it.
It truly is an investment
While it all may seem easy and cheap, it's actually not - it's still an investment that you need to make, starting from the fact that you need crypto currency and not actual money. This kind of investment is far from the classic kind of investment you have in mind, the steps and risks are completely different. You need to be prepared to open up a crypto wallet and fill it before jumping into your NFT ventures, and it won’t be cheap - but you might get lucky and re-sell it and make more money, you never know.
It’s extremely important to only buy and trade on well-known and trustworthy platforms, all to prevent a possible scam. Unfortunately, there is a way for people to ‘’sell’’ stolen art and this can leave you with a useless piece of digital media you can't re-sell or give back - all you'll do is lose money in the process. Since nowadays anyone can create a website and claim pretty much anything, do a lot of research when creating a crypto wallet and indulging in NFT buying, all to ensure your safety. It's always better to be safe than sorry!
Another step to ensure that your NFT investment is safe and secure, it's smart to look for seller verification. It's basically the equivalent of a blue check on Twitter or Instagram, it will assure you that the seller is legit. But some up-and-coming artists don't even have it. That doesn't mean they are not credible - that's why doing a little research is a must. See what other NFTs have sold and check out their social media to see if they are truly the artist or proper seller behind it.
It's hard to say how NFTs are valued, some are sold for millions of dollars whilst others are sold for a few bucks. It’s important to note that every NFT is different and special, the whole process of making it is quite intricate - so many elements go into it. But if you are dead set on investing in them, it’s important to know if you are being ripped off or if you are paying the right amount! The best way to do so is to take a look at the seller's work and at what price is it being sold for.
You can make them too
Whilst a lot of people are interested in buying and trading NFTs, a lot of people are also looking forward to making them. As you can see from jungle, the process is not that hard - minus all the things that you need to obtain beforehand. If you already have a crypto wallet ready and are willing to invest, why not make one yourself as well! Whilst everyone should go into it with a cold head, there is still hope and a possibility to sell your NFT at a high price and get some money.
Regardless of what kind of investment it is, you shouldn't ever rush into it. The same goes for investing into crypto or tokens, there are certain things that you should think about before making such a large financial decision. First make sure that you can afford it, and if NFTs are the right path you want to take, as opposed to keeping or selling your crypto directly. If you are strictly a buyer and a future seller, this is extremely important for you - always consider every option and never go over the limit, some risks are totally not worth it!
The transaction fees
Yes, there are some additional fees you need to consider on top of everything else! Just like any other platform that’s meant for holding money, exchanging crypto also takes a percentage - just like a transaction on Paypal! Obviously it all depends on the platform, as the percentage differs, some are around 2%, others more or less, it all depends! It's a good idea to choose the right trading platform and thoroughly research it - all the fees and additional elements that might influence your transaction - these things are extremely important and don't let them surprise you! It’s always smart to be completely prepared, especially when it comes to your finances!
The effect on the world
Whilst the NFTs are making waves in the art industry, it's also making a big impact on the world, but not in a good way, unfortunately. Since you’ll need to have a crypto wallet, crypto is made by mining which is not good for the environment. This is obviously connected to the NFTs, whilst the process of making these tokens come to life isn't wasteful, the other side of things certainly is. This shouldn’t throw you off from making the decision to invest into them, but it's definitely something you should have in mind, as the environmental side of things should be talked about.
Investments are great, some pay off extremely well, and some not so much - it all depends on how you approach it. The same can be said with NFTs, so do the research and make the right decision!
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